Pensioners will get a 3.9% increase from today.
Retirees will get a welcome income boost from this week when the government increases the state pension by 3.9%.
The amount by which the new state pension rises is determined by the so-called triple lock. This means that state pensions must rise at the start of every tax year at the rate of earnings growth, the rate of inflation, or 2.5%, whichever was highest during September of the year before.
From the start of the 2020/21 tax year on 6 April, the government-backed pension will increase by earnings inflation, which was 3.9% last September.
How much extra will I get?
Those who reached state pension age after 6 April 2016 are eligible for the new state pension, currently a maximum of £168.60. This will rise to £175.20.
Retirees who reached state pension age before 6 April 2016 are entitled to the basic state pension. This is £129.20 now and will be £134.25 when the increase comes in.
Steven Cameron, of Aegon, says: “The government’s commitment to maintaining the state pension triple lock will offer some good news in a difficult climate for state pensioners as they will receive a bumper increase in state pension payments from next week.”
When am I eligible for the state pension?
This depends on sex and date of birth. For women born before 6 April 1950, their state pension age remains 60. For those who are younger than this, their state pension age will be greater than 60. If you were born on or after 6 April 1950, but before 6 December 1953, the state pension age will be somewhere between 60 and 65, depending on date of birth.
For those born on or after 6 December 1953, but before 6 April 1978, their state pension age will be somewhere between 65 and 68 depending on date of birth. The state pension age is 68 for those born on or after 6 April 1978.
Pensioners will need to have paid 30 years of National Insurance contributions to be eligible for the full allowance.
This article was first written by our sister magazine Moneywise.