State pensioners born in these years get a handy £37 extra in May.
Older state pensioners will get a £37 boost in May (Image: Getty)
Older state pensioners are being handed an extra £37 in May after a triple lock boost which kicked in from April.
The state pension is guaranteed to increase every year based on one of three metrics – inflation, wage growth or a flat 2.5%, and this is enshrined in law for both the new post-2016 state pension and the older, basic state pension.
And it has been confirmed that the triple lock is producing a £439.40 increase for older state pensioners across the tax year, running April to April, assuming they have a full National Insurance record. That’s because the key average earnings figure has been confirmed at 4.8%, which is higher than inflation and, of course, higher than the 2.5% minimum floor for increases.
Across the year, that makes £37 a month when averaged out across 12 months, although the pension payments themselves are actually paid every four weeks by the DWP, so the date of payment shifts each month throughout the year.
Those with incomplete records will see lower total take-home for their pension payments, depending on how far off the full record they are, which the DWP calculates on a case-by-case basis when you first hit state pension age.
Older state pensioners who hit state pension age before April 2016 are seeing their payments increase from £176.45 to approximately £184.90, while new state pensioners see theirs rise from the current £230.25 to £241.30 per week.
Crucially, both of these will still be below the £12,570 Personal Allowance threshold for income tax for those with no other income.
There is also another DWP rule which will allow older state pensioners to boost their weekly payments, depending on their income and savings.
Pension Credit is a benefit which older state pensioners (and new state pensioners) can use to boost their income. For example, an older state pensioner who only qualifies for the basic state pension will get £184.90 per week.
But Pension Credit tops up this amount up to £238 per week, which is only a few pounds less than the new state pension anyway (£241.30). However, your other income, such as work earnings, property income, savings interest or a private pension, is counted first, and you won’t be able to get the full amount if you have exceeded income limits.
Kirsty Ross, proposition director for People’s Partnership, the provider of People’s Pension, said: “The value of the state pension is essential information for millions of people, including those still in work, as it forms the foundation of retirement income for most savers.
“For those thinking about retirement, it’s also crucial to understand the age at which they can start claiming the state pension.
“For example, people hoping to retire early will need to plan how they will bridge the gap until their state pension kicks in.”