MILLIONS of households who receive a state pension are set to get more cash from today.
The amount people get in retirement usually rises each year, and 2024 is no different.
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The state pension will rise by whichever is highest: earnings, inflation or 2.5%. This is known as the pension triple lock.
Growth in employees’ average total pay was 8.5% in the three months to July 2023, while the UK’s rate of inflation remained at 6.7% in September.
It means pensioners on the new state pension are set to receive a £901 a year boost from today – the first Monday after the new tax year.
This is up from just over £10,600 to £11,501 a year.
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And a weekly rise from £203.85 to £221.20 – a £17.35 increase.
It’s important to note though that this is for those entitled to a “full” new state pension.
How much individuals get is based on the number of qualifying years of National Insurance contributions they’ve accrued.
Older pensioners who retired before April 2016 and on the basic state pension will get a weekly rise from £156.20 to £169.48, and an annual rise from £8,122.40 to £8,812.96.
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Other elements of the old state pension system, mainly “additional” state pensions such as SERPS, will rise in line with the increase in CPI inflation for September which was 6.7%.
The Department for Work and Pensions (DWP) sent letters to pensioner households to inform them of the exact amount their own pension will rise by.
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This is useful as how much individuals get is based on the number of qualifying years they’ve accrued.
It also contains a key detail covering how the uprating affects “additional” state pension payments.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 – but it’s due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people’s National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
When will my state pension payments increase?
A code in your National Insurance number tells you the exact date you will see payments increase.
This is because the number dictates what day you receive your pension money.
State pension is paid every four weeks and the day you’re paid usually depends on the last two digits of your NI number.
If the digits are between 00 and 19, you are paid on a Monday.
It’s Tuesday if they are between 20 and 39, and Wednesday if the digits are between 40 and 59.
Numbers 60 to 79 are paid on a Thursday and numbers 80 to 99 are usually paid on Fridays.
As an example, if your NI number ends in 65, you could see your payment rise on April 11, if that’s the time of the month you usually get paid.
Bear in mind, state pension is usually paid every four weeks, so if you are expecting a payment between April 1 and 5, you might not actually see your pay rise until early May.
How do I claim the state pension?
You won’t automatically get the state pension – you need to claim it once you’re eligible.
You should receive a letter no later than two months before you reach state pension age, explaining what to do.
You can find out more here.
You can choose to defer getting the state pension – you don’t have to take it as soon as you are eligible when you reach state pension age.
Leaving your state pension untouched can boost the amount you eventually get.
If you opt to defer your state pension, your entitlement increases by the equivalent of 1% for every five weeks you do so.
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As the state system can be tricky to navigate, a key part of any pension planning involves requesting a state pension forecast.
This will help you get your head around how much you could be eligible to receive, and from what age.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
