MILLIONS of people receiving the state pension are set for a boost when the payments increase next month.
The state pension will increase by 3.1% in April – are you set for a pensioner pay rise?
1
The state pension is money paid by the government each week to give older people a minimum level of income.
Most people will need to supplement it with their own savings or retirement pot while some may continue working and taking the state pension.
The payments start once you reach state pension age, which is currently 66 for men and women.
The amount you get will depend on when you reached state pension age and your national insurance contributions.
The payments also increase each year to help pensioners keep up with the cost of living.
They are usually set using a calculation known as the triple lock, which increases payments based on the highest of earnings, the consumer price index inflation figure or 2.5%.
Most read in News Money
However, the triple lock has been scrapped for one year due to the impact of the Covid pandemic.
Wages have soared by around 8% since lockdown ended, which would have forced the Chancellor to find billions of pounds extra to fund pensions.
Instead the triple lock will be replaced with a double lock promise – for just one year and will rise by 3.1%, which was the inflation figure when the decision was made late last year.
Here is what you need to know.
Who gets the state pension?
There are two different state pension systems.
Anyone who reached state pension age after April 6 2016 will receive the new state pension.
You’ll be able to claim the new state pension if you are a man born on or after April 6 1951 or a woman born on or after April 6 1953.
You usually need 35 years of national insurance contributions to get the maximum payments and at least 10 years to get anything at all.
If you don’t have the full amount than the amount of state pension you get will be lower.
It is possible to make voluntary national insurance contributions to top up your record, usually from the previous six years.
Anyone who reached state pension age before April 2016 will be on the old basic state pension.
You can claim the basic state pension if you are a man born before April 6 1951 or a woman born before April 6 1953.
It is split into four categories – A, B, C, and D.
- A – a contributory payment which includes the basic pension and an additional earnings element, dependent on the claimant’s NIC record.
- B – a contributory payment, dependent on NICs paid by a spouse or civil partner.
- C – a non-contributory payment, with very few (if any still) being claimed.
- D – a non-contributory payment for some individuals over age 80, subject to certain conditions.
You usually need 30 years of qualifying national insurance contributions for the basic state pension but you may be able to make voluntary payments.
How much is the state pension?
The amount you receive depends on which state pension you are on and your level of national insurance contributions.
The full new state pension rate is currently £179.60 per week and will rise to £181.15 next month.
Those on the basic state pension get a lower amount but it is still increasing in April.
The amount you receive will depend on the category you fall into.
- Category A or B basic pension: £137.60 rising to £141.85 in 2022
- Category B (lower) basic pension – spouse or civil partner’s insurance: £82.45 rising to £85.00 in 2022
- Category C or D – non-contributory: £82.45 rising to £85.00 in 2022.
Many other benefits will rise by 3.1% next month too – check out the full list.
Meanwhile pensioners on low income could get extra help from Pension Credit – here’s how.
You can check your state pension age on the Gov.uk website.
We pay for your stories!
Do you have a story for The Sun Online Money team?
