A lot of news has been released recently affecting pensioners, so let’s have a quick run-down of what’s going on…
State Pension Triple Lock Increases
The BBC has calculated that the State Pension will almost certainly be increased by average earnings figures released next week.
The Triple Lock means that the State Pension increases every tax year by whichever of the following is highest:
- A 2.5% increase
- In line with inflation, as measured by the Computer Prices Index in the September of the previous year
- Average earnings across the UK
The BBC believe that the increase in April 2025 will be linked to average earnings, meaning it’s expected to be worth at least £300 0r £400 depending on which state pension people are receiving.
These increases could see the full new State Pension reaching around £12,000 in the 2025-26 tax year.
The decision on a pension increase will be made before the October budget by Liz Kendall, the secretary of state for work and pensions. However, the chancellor, Rachel Reeves confirmed at the start of this week that the government would continue to back the Triple Lock until the end of this parliament.
How the State Pension Works
The amount of State Pension you get depends on your National Insurance (NI) record. To get any new State Pension, you have to have 10 qualifying years on your NI record. A qualifying year is one where you were
- Working and making National Insurance contributions
- Getting NI credits, e.g, if you were unemployed, ill, a parent, or a carer
- Paying NI contributions voluntarily
The full rate of new State Pension is currently £221.20 a week, but the amount you get could be different depending on your number of qualifying years, whether you were contracted out before 2016, or if you aid into the Additional State Pension before 2016.
Winter Fuel Allowance Decisions
There have also recently been discussions about limiting the Winter Fuel Payment. Rachel Reeves revealed plans last month to introduce means testing for this benefit, where only those on pensions benefit (a payment for those on an income less than £12,600) would qualify.
This would reduce the number of pensioners receiving the payment from 11.4 million to 1.5 million.
For more information on claiming Winter Fuel Payment, click here and for more information on what State Pension you might be entitled to, click here.