BRITS can begin claiming State Pension when they reach a certain age.
The amount people get rises every year in order to keep up with the cost of things like food and household bills.
DGKPJW Government Pensions Service leaflet on State Pensions.Alamy
The annual increase is usually calculated according to what is known as the triple lock.
Under the triple lock, all state pension payments have to rise by whatever is highest: inflation, wages or 2.5%.
As inflation hit 10.1% in September, the government committed to the triple lock and confirmed that pension payments would increase at this rate into the 2023/24 financial year.
But what does that mean and how much will payments go up this year?
How much is the state pension in 2023?
State Pension payments were increased on April 10 this year.
The full rate of the new State Pension has risen from £185.15 a week to £203.85.
This equates to £10,608 in total over a year.
This is what the state pays those who reach state pension age after April 6, 2016.
The full basic State Pension under the old system is now £156.20 per week in 2023/24.
This is paid under the old pension system and is for those who retired before April 6, 2016.
There is also the additional state pension under the old system, which is an extra payment on top of the basic state pension some are entitled to.
How much state pension will I actually get?
The amount of new state pension you receive depends on your National Insurance (NI) record throughout your adult life.
If you have made at least 35 years of qualifying NI contributions, you may qualify for the maximum amount, outlined above.
The same is true if you have received equivalent credits on your NI record for raising children or providing care.
If you don’t have 35 years, you may be able to top up your record by paying in voluntary NI contributions.
To get the full basic state pension you will need 30 years of NI contributions or credits.
To get any state pension at all, you will need at least 10 years on your NI record.
What age do I get the state pension?
In response to rising life expectancy, the age at which you become eligible to receive the state pension has been going up.
The age is now 66 for both men and women and is set to reach 68 by 2039.
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.
Meanwhile, 150,000 grandparents could be missing out on a hefty pension boost – how you can claim it.
Plus, charities are warning the increase in state pension will be wiped out by a soaring cost of living.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]