MILLIONS of retirees are set to receive a bumper pay rise from April.
Ahead of the boost, the Department for Work and Pensions (DWP) is sending letters to pensioner households to inform them of the exact amount their own pension will rise by.
It means pensioners on the new state pension are set to receive a £901 a year pay rise
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.
Michael Clarke, head of information programmes at Turn2Us, says: “It’s really important for pensioners to know exactly how much money they’ll get, and these letters will help with that.
“Everyone’s pension is different, so it’s good to get a heads-up to plan for the year ahead.”
Under the triple lock, the state pension is uprated in April by inflation for the previous September, wages or 2.5%, whichever is higher.
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.
This is up from just over £10,600 to £11,501 a year.
And a weekly rise from £203.85 to £221.20 – a £17.35 increase.
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.
But these letters will also help explain how other components of the state pension, including “additional” state pensions, will actually rise by inflation at 6.7%.
Joanna Elson CBE, chief executive of Independent Age, said: “These letters provide clarity and information that allows recipients to plan as much as possible for the year ahead.
“It’s important those receiving entitlements attached to the State Pension, such as additional state pensions or pension credit, are aware that these will not be rising in line with earnings as they are not part of the triple lock.
“They will be rising with inflation instead, a smaller figure.”
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 which is currently 66.
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 with no National Insurance record before April 2016 must have 35 qualifying years to get the total amount of the new state pension when they reach their golden years.
If you don’t have 35 years, you can top up your record by paying in voluntary NI contributions.
To get the old, full basic state pension, you will need 30 years of NI contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
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.
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.