Millions of UK state pensioners are set for a payment increase this April, thanks to the government’s triple lock system. This guarantee ensures that state pension payments rise each year by the highest of inflation, wage growth, or 2.5%.
This time, the increase is based on wage growth, which stood at 4.1% between May and July last year.
So, how much more will you receive? That depends on whether you’re on the new state pension or the basic state pension, which is determined by your date of birth. Let’s break it down.
Payments
If you’re a man born on or after April 6, 1951, or a woman born on or after April 6, 1953, you qualify for the new state pension.
- Current weekly amount: £221.20
- New weekly amount (from April): £230.30
- Annual increase: £473
Basic pension
If you were born before the above dates, you fall under the basic state pension category.
- Current weekly amount: £169.50
- New weekly amount (from April): £176.45
- Annual increase: £361
| State Pension Type | Current Weekly | New Weekly (April 2024) | Annual Increase |
|---|---|---|---|
| New State Pension | £221.20 | £230.30 | £473 |
| Basic State Pension | £169.50 | £176.45 | £361 |
National Insurance
Your exact state pension payment depends on your National Insurance (NI) record. To qualify for:
- Full new state pension – 35 years of NI contributions
- Minimum state pension – at least 10 years of NI contributions
If you have gaps in your NI record, you can voluntarily contribute to increase your pension. However, from April 5, 2024, you will only be able to backdate six tax years, rather than going as far back as 2006.
State Pension
There’s a growing concern that pensioners may face tax bills as the personal allowance (the amount you can earn tax-free) remains frozen at £12,570.
With the full new state pension reaching £11,975 per year, pensioners are close to hitting the threshold. Any additional income from savings, private pensions, or work could mean paying income tax.
Rachel Vahey, from AJ Bell, warns:
“The state pension will soon overtake the frozen personal allowance, forcing the government to rethink how pensions are taxed and funded in the future.”
Change
With pension payments rising faster than tax thresholds, the government may be forced to act. But what will they do? Possible changes include:
- Raising the personal allowance – allowing pensioners to keep more of their money tax-free
- Slowing pension growth – which could make retirement harder for those relying solely on the state pension
- Changing the state pension age – delaying when people can claim their pension
For now, pensioners can expect their payments to increase from April 2024, but tax implications could become a bigger issue in the years ahead.
FAQs
How much is the new state pension in 2024?
From April 2024, the new state pension will be £230.30 per week.
How much is the basic state pension in 2024?
From April 2024, the basic state pension will be £176.45 per week.
Why is the state pension increasing?
The increase is due to the triple lock, based on wage growth of 4.1%.
Will pensioners have to pay tax?
Some may, as the new state pension is close to the personal allowance limit.
Can I still top up my National Insurance record?
Yes, but from April 5, you can only backdate up to six years.
