The UK government has announced a substantial increase in the state pension, set to take effect in April 2025. This rise, which is part of the government’s commitment to the triple lock system, will see the full state pension increase by £472 annually, reflecting a 4.1% rise linked to wage growth.
Key Takeaways
- The full state pension will rise by £472 a year from April 2025.
- The new flat-rate state pension will be £230.25 per week.
- The old basic state pension will increase to £176.45 per week.
- The triple lock guarantees annual increases based on inflation, earnings, or a minimum of 2.5%.
What Is The State Pension?
The state pension is a government payment made every four weeks to individuals who have reached the qualifying age and have paid sufficient National Insurance contributions. As of April 2024, the state pension amounts are:
- New Flat-Rate State Pension: £221.20 per week (for those reaching state pension age after April 2016)
- Old Basic State Pension: £169.50 per week (for those reaching state pension age before April 2016)
Upcoming Changes in April 2025
From April 2025, the state pension will see the following increases:
- New Flat-Rate State Pension: £230.25 per week (an increase of £472 per year)
- Old Basic State Pension: £176.45 per week (an increase of £363 per year)
Understanding The Triple Lock
The triple lock system, introduced in 2010, ensures that the state pension increases each April based on the highest of three measures:
- Inflation (measured by the Consumer Prices Index in September of the previous year)
- Average wage growth (from May to June of the previous year)
- A minimum increase of 2.5%
Chancellor Rachel Reeves has confirmed that the Labour government will maintain the triple lock until the end of the current Parliament.
State Pension Age Changes
Currently, over 12 million people receive the state pension. The state pension age is set to rise gradually:
- Age 67 for those born on or after 5 April 1960
- Age 68 for those born on or after 5 April 1977, with changes expected between 2044 and 2046
Financial Implications
The state pension is a significant part of the UK’s welfare system, costing £110.5 billion in 2022-2023, which is nearly half of the total government spending on benefits. This figure is projected to rise to £124 billion for 2023-2024.
Pension Credit and Other Benefits
In addition to the state pension, eligible individuals may receive pension credit, which tops up weekly income:
- Single: £218.15 (April 2024)
- Couple: £332.95 (April 2024)
From April 2025, pension credit will also increase by 4.1%, resulting in:
- Single: £227.10 (an increase of £465 per year)
- Couple: £346.60 (an increase of £710 per year)
Conclusion
The upcoming increase in the state pension is a crucial development for millions of retirees in the UK, providing much-needed financial support amid rising living costs. The commitment to the triple lock ensures that pensioners will not fall behind in terms of income relative to inflation and wage growth, securing their financial stability for the future.
