The UK’s elderly population has received an increase in the amount they get in their state pensions after changes made for the new financial year.
Claimants of the benefit payment made by the Department for Work and Pensions (DWP) saw a rise in the regular amount received in April.
It comes as a result of the triple lock ruling which safeguards the value of the state pension against inflation – and ensuring pensioners don’t lose out.
What is the state pension?
The state pension is an amount of money issued regularly by the government to most people who reach the required age to start making claims.
It depends on a number of factors such as when you were born, with the age threshold increasing, and how much in National Insurance contributions you have made.
The current state pension age for men and women is 66. The age threshold is scheduled to rise to 67 between 2026 and 2028, and is expected to increase to 68 from 2037.
It means anyone born after 6 April 1978 will not be eligible for a state pension until they turn 68.
How much is the current state pension?
The full new state pension is currently £175.20 per week, which amounts to £759.20 a month and £9,110.40 per year, though this is set to change.
Is the state pension changing?
Under the triple lock ruling, pensions increase each year to maintain value against inflation.
The triple lock ensures an increase each year by whichever is the highest out of the average percentage of wages growth in the UK, the percentage growth in prices in the UK, or 2.5%.
State pension payments are set to increase by 2.5% for men and women over the age of 66.
When will the state pension increase?
The state pension increase will be brought in from the week beginning 12 April 2021.
People over the age of 66 on the full state pension will see an increase of 2.5% to their weekly sums, equating to a weekly rise of £4.40 on £175.20 to £179.60.
This means pensioners claiming the full state pension will receive a boost of £19.01 a month, which works out at a £228.80 rise over the 2021/22 financial year.
What is a private pension and when can I access it?
Private pensions are a way for people to save additional money for later in life through regular contributions made by themselves or their employers, and are separate to the state pension.
An ongoing review into private pensions is likely to result in savers having to wait an additional two years before accessing their retirement pots, due to the state pension age threshold rising.
People can access defined contribution pensions, a percentage of earnings accumulated over time in employment dependent on investments, typically 10 years earlier than state pensions.
The age threshold had been 55 but will increase to 57 from 2028, according to plans set out by the treasury, in line with the expected increase in age people have to wait for the state pension.
Tom Selby, senior analyst at AJ Bell, said: “The rise in the normal minimum pension age from 55 to 57, which has been long trailed by the government, is designed to reflect rising life expectancy, and will maintain a 10-year gap between the point someone can access their private pension and the state pension age.”