The UK’s state pension will increase by 8.5% from April 2024. This is for people who have paid into the National Insurance Contributions (NIC) for at least 10 years and have chosen to retire after 60.
If your total taxable income exceeds a certain limit, you might have to pay tax on your state income. You must have a National Insurance (NI) number and a government account to get a UK State Pension. Once you have these, you can check your payment status whenever you want.
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UK State Pension Changes 2024
The state pension usually increases in April. In 2024, it will increase by 8.5%. The pension increases each year based on three factors: the average growth in income, a minimum of 2.5%, or inflation. This is known as the ‘triple lock’. These factors ensure that the amount pensioners get doesn’t go down.
In 2023, the pension rate was 6.7%. The state pension has increased from 6.5% to 8.5%, much more than the 2.5% inflation rate. The new state pension in April 2024 will be €221.20 weekly, compared to €185.15 in 2022/23.
Types of Pensions in the UK
In the UK, there are two types of pensions for eligible older people: the state and private pensions.
- State Pension: This is for people who have paid into the national insurance pension at some point. It will be paid to you once you reach 60 or above. The exact age depends on your gender and when you choose to retire. If you rely completely on the state pension, you might also be able to get other benefits like pension credits, housing benefits, widow’s pension, and payments related to disability.
- Private Pension: In this case, the pension provider invests all the money you put into your pension. You can start taking money out when you turn 55. So, a personal pension could be a good option if you want to retire early.
Remember, you can retire at any age in the UK, but there is a certain age at which you can start getting the state pension.
Ten-Year Overview of the Triple Lock
Here’s a simple look at how the three factors (average income growth, a minimum of 2.5%, or inflation) have affected the state pension over the last ten years:
Year |
Factors |
Increase |
|---|---|---|
2015/16 |
2.5% |
2.5% |
2016/17 |
Earnings |
2.9% |
2017/18 |
2.5% |
2.5% |
2018/19 |
CPI |
3% |
2019/20 |
Earnings |
2.6% |
2020/21 |
Earnings |
3.9% |
2021/22 |
2.5% |
2.5% |
2022/23 |
CPI |
3.1% |
2023/24 |
CPI |
10.1% |
2024/25 |
Earnings |
8.5% |
The biggest increase in the state pension in the last ten years was in 2023/24.
Wrapping Up
The increase in the state pension will start from 8th April 2024. The tax year 2024 will start on the 6th of April, and the increase will show up in people’s accounts from the 8th onwards. The new amount of €221.20 every week should be enough for older people. From April, they won’t have to depend on others to pay for healthcare bills, groceries, and basic needs at home.
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