Increase to the State Pension
As the 2018/2019 tax year started, the State Pension increased by 3%.
The State Pension rate is determined by the ‘Triple Lock’ system, where the State Pension rises by the greater of:
• Annual price inflation, as measured by the Consumer Price Index, or
• Earnings growth, or
September 2017's inflation figure was 3%, making it the higher value of the three and therefore the amount of the State Pension increase.
If you receive a pension, what does this mean for you?
The new State Pension
If you reached State Pension age on or after 6 April 2016, then you receive the new State Pension.
Your pension has increased by £4.80 to £164.35 a week. This means you will be nearly £250 better off by the end of the tax year, with a total annual income of £8,546.20, for those eligible.
The old Basic State Pension
If you reached State Pension age before 6 April 2016, then you receive the old Basic State Pension.
Your pension has increased by £3.65 to £125.95. This means you will be nearly £190 better off by the end of the tax year, with a total annual income of £6,549.40 for those eligible.
Pension credit has also increased by 3%.
Pension Credit is an income-related benefit made up of 2 parts - Guarantee Credit and Savings Credit.
• Guarantee Credit tops up your weekly income if it’s below £163.00 (for single people) or £248.80 (for couples)
• Savings Credit is an extra payment for people who saved some money towards their retirement, for example a pension. However, you may not be eligible for Savings Credit if you reached State Pension age on or after 6 April 2016.
You can find out more about Pension Credit and view a Pension Credit Calculator to see how much you may be eligible for here.