The state pension, the money the UK government gives to old people, will be increased by 8.5% starting in April 2024. This money is for people who have paid into the National Insurance Contributions (NIC) for at least 10 years and have decided to stop working at an age above 60.
This money is taxed if your total earnings in a year are more than a certain amount. To get this pension, you need an NI number and a government account. Once you have these, you can check how much money you will get anytime.
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UK State Pension Updates for 2024 and 2025
Every April, the money given to old people increases. In 2024, the increase will be 8.5%. This increase is based on three things: how much the average income has grown, a minimum of 2.5%, or the rate of inflation. This is known as the triple lock. These things ensure that the amount of money old people get does not decrease.
The increase in 2023 was 6.7%. The state pension has increased from 6.5% to 8.5%, much higher than the 2.5% inflation rate. The new state pension in April 2024 will be €221.20 every week, whereas in 2022/23, it was €185.15.
Types of Pensions in the UK
In the UK, eligible old people get two types of pensions: the state pension and the private pension.
- State Pension: The state pension is for those who have paid into the national insurance pension at some point and will be paid once the individual is 60 or older. The age depends on the person’s gender and when they decide to stop working. Old people who only get the state pension might also get other benefits like pension credits, help with housing costs, widow’s pension, and payments related to disability.
- Private Pension: In this case, the pension provider invests all the money you put into your personal pension. You can take out this money when you are 55. So, the personal pension is a good choice if you want to stop working early.
Remember, you can stop working at any age in the UK, but there is an age at which you can start getting the state pension.
Ten-Year Overview of the Triple Lock
Here is a simple list of the three things that affect how much the state pension increases each year:
Year |
Things That Affect Increase |
Increase in Percentage |
|---|---|---|
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% |
In the last ten years, the biggest increase in the state pension was in the year 2023/24.
Summary
The increase in the state pension will start on 8 April 2024, the tax year 2024 will start on 6 April, and the increase will be added to the money old people get from 8 April onwards. The new amount of €221.20 every week is enough for old people. From April, they will not have to depend on others to pay for healthcare, groceries, and basic needs at home.
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Mahesh Sen, a seasoned student advisor, writes informative articles on educational topics. Mahesh gives valuable insights and practical advice to guide students through their academic challenges and milestones.