state pension rise

The state pension is rising this year, but not for everyone…

havenifa

havenifa


Posted on: 24th January 2020

From April 2020, payments from the state pension are set to rise. This rise is due to the triple lock. However, while some individuals with pensions should expect to see a rise in their monthly income, there are others who will miss out on this increase.

State pension rises under the triple lock

When the state pension rises under the triple lock, it will do so based on whichever is the highest out of earnings. In other words, it will wise based on one of the following:

  • The average percentage growth in wages
  • The percentage growth in pieces as measured by the Consumer Prices Index (CPI)
  • 5 per cent

This year, the highest increase is wage growth. Therefore, the State Pension income will rise in line with this increase.

The numbers

As of April, the full rate of the UK’s state pension will increase by 3.9 per cent. In other words, it will rise from £168.60 to £175.20 per week. This means that those who receive the full new state pension will receive an additional £344 a year.

At the same time, the full weekly rate of the basic state pension will rise at the same rate, from £129.20 to £134.25 per week. Therefore, those with the full basic state pension will receive an additional £5.05 per week, while those with the full new state pension will receive an extra £6.60 per week.

Who doesn’t receive this increase?

However, the DWP points out that due to transitional arrangements for the state pension, this increase will only apply to certain pensioners. It continues to mention that the new state pension factors in National Insurance records. Additionally, some people will receive more, and others will receive less than this amount.

Some people who receive the state pension, however, should not expect to see their state pension increase in April. According to the government website, the state pension will have a different effect on those who have retired abroad. If you would like to learn more about the effects on those abroad, click here.

Prepare your finances for any upcoming pension changes with help from Haven IFA

No matter your financial situation, planning ahead for any changes is essential for a comfortable and enjoyable retirement. With the help of an independent financial adviser, you can relax knowing your pension is in safe hands. This is where Haven IFA comes in. If you would like to make the most from your retirement savings, get in touch to see how we can help.

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