Video Loading Video Unavailable Click to play Tap to play The video will auto-play soon 8 Cancel Play now Millions of retirees in receipt of the New or Basic State Pension are set for a significant income boost from this month after the Department for Work and Pensions (DWP) confirmed that weekly payment rates increased by 8.5 per cent on April 8. Additional State Pension elements, such as deferred amounts, have gone up by 6.7 per cent. Someone on the full New State Pension will now see payments go up from £203.85 per week to £221.20 and as payments are typically made every four weeks, this amounts to £884.80 each pay period. Over the 2024/25 financial year, this is an increase of £902, taking the annual income from State Pension alone from £10,600 to £11,502. Someone on the full rate of the Basic State Pension will see payments go up from £156.20 per week to £169.50 - this amounts to £678 each pay period. During the 2024/25 financial year, this is an increase of £692, taking the annual income from £8,122 to £8,814. Read More Related Articles New State Pension rates this week will not be paid to 450,000 older people Read More Related Articles People over State Pension age with a heart condition could be due up to £434 each month It's important to be aware that even though weekly rates have now risen, payments from the DWP are made in arrears which means it may take up to four weeks for people to see the full uprating reflected in payments. State Pension payments can be made weekly, fortnightly or every four weeks - it all depends on which payment option was selected when the original claim for the contributory benefit was made. The increase of 8.5 per cent is due to the earnings growth measure of the Triple Lock. Under the Triple Lock, the State Pension rises each year in line with inflation, earnings or 2.5 per cent - whichever is higher. The measures that influenced the 2024/25 uprating areas follows: Average annual earnings growth from May to July - 8.5% Consumer Price Index (CPI) inflation in the year to September - 6.7% 2.5% Commenting on the uprating,
Secretary of State for Work and Pensions, Mel Stride MP said: “Thanks to the Triple Lock and our efforts to drive down inflation, we are putting money back in the pockets of pensioners. This is only possible because we have stuck to our plan and our
economy has turned a corner. “This will make a meaningful difference to all those who rely on the State Pension and ensure we continue to provide a safety net for those who need it most while making work pay wherever possible.” Minister for Pensions, Paul Maynard MP said: “It’s only right that after a lifetime of work that we protect our pensioners’ incomes. Our sustained commitment to the Triple Lock demonstrates our determination to continue to combat pensioner poverty, and to ensure that the State Pension will continue to provide the foundation of income in retirement so many need.” Top Money Stories Today New PIP pay rates and points system When to renew Blue Badge to avoid fine Full list of new DWP payment rates Step-by-step guide to cheaper broadband New State Pension payment rates 2024/25 These payments have risen by 8.5%: Full payment rate: £221.20 (from £203.85) Every four-week pay period: £884.80 (from £815.40) Basic State Pension payment rates 2024/25 These payments have risen by 8.5%: Category A or B Basic State Pension (full rate): £169.50 (from £156.20) Every four-week pay period: £678.00 (from £624.80) Category B (lower) Basic State Pension - spouse or civil partner's insurance: £101.55 (from £93.60) Category C or D - non-contributory: £101.55 (from £93.60) Additional pension payments Increments to the following will rise by 6.7%: Maximum additional pension (own plus inherited): £218.39 (from £204.68) Increments to the following will rise by 6.7% Basic pension Additional pension Graduated Retirement Benefit (GRB) Inheritable lump sum Addition at age 80: £0.25 (no change) Increase of Long-term incapacity for age Higher rate: £28.40 (from £26.60) Lower rate: £14.20 (from £13.30) Invalidity Allowance (Transitional) for State Pension recipients Higher rate: £28.40 (from £26.60) Middle rate: £18.20 (from £17.10) Lower rate: £9.10 (from £8.55) Latest State Pension News £434 for older people with heart issues Benefits that stop at State Pension age Update on extending free bus pass travel Full list of
Women due up to £12,500 State Pension and Personal Tax Allowance The Personal Tax Allowance threshold will remain frozen at £12,570 during the 2024/25 financial year, which means older people with an income of more than £242 per week may have to pay income tax. Over the 2024/25 financial year, the full New State Pension will be worth £11,502, leaving just £1,068 before the personal tax threshold is exceeded, so anyone with additional income of £89 or more per week - on top of State Pension - may receive a tax bill the following year. Similarly, someone on the full rate of the Old or Basic State Pension will see annual payments go up £8,814. This leaves just £3,756 before the personal tax threshold is exceeded, equivalent to additional income totalling £313 per month. Pension consultants LCP (Lane Clark & Peacock) have warned a growing number of pensioners could be dragged into the tax net based purely on a State Pension, adding there is no automatic way of collecting the tax that they owe, because State Pensions are paid in full, before the deduction of tax. In such cases, HM Revenue and Customs (HMRC) could operate a system known as ‘simple assessment’. Under ‘simple assessment’, the DWP would notify HMRC at the end of a tax year how much State Pension people have received. If this takes someone over the income tax threshold, there would then be a tax bill to be paid. LCP said HMRC may write to the pensioner after the end of the tax year telling them they have not paid the tax due on their State Pension and requiring them to make a payment before January 31 the following year. The pension experts warned pensioners could have received - and spent - all of their pension during one financial year only to receive a tax bill on that pension the following year. For pensioners who have a State Pension and a private pension, the state will collect any tax due through the code applied to the private pension. Get the latest Record Money news Join the conversation on our Money Saving
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