Advertisement

How much the state pension will rise by this year

While Boris Johnson promised to hold a full budget within 100 days of his election victory, many of the details of next year’s state pension increases were unveiled last month.

While Boris Johnson promised to hold a full budget within 100 days of his election victory, many of the details of next year’s state pension increases were unveiled last month. The budget will confirm the final figures, but the changes, which come into effect in April, are based on the “triple-lock” formula. This guarantees that state pensions will rise in line with the highest of inflation, average earnings, or 2.5%.

Advertisement - Article continues below

Back in October, the date at which this assessment is made, earnings growth was running at around 4%. As a result, the full new state pension will be £175.20 a week, up from the current £168.60. Alternatively, for those who reached the state pension age before April 2016, and receive the basic state pension, the weekly payment is rising from £129.20 to £134.25.

However, these are only headline rates. The most recent government data suggests only two-thirds of people receive the official figures; some get more and many get less, depending on the national insurance contributions they’ve paid. If you’re not sure about your entitlement, ask for a state pension forecast.

In another change to state pensions in 2020, the increase in state pension age will continue. By October, men and women will have to wait until their 66th birthdays to claim state pension benefits for the first time. There will then be a standstill period, with the age due to rise again, from 66 to 67, between 2026 and 2028.

Advertisement
Advertisement

Recommended

Companies cut back on their pensions bills
Personal finance

Companies cut back on their pensions bills

Britvic is the latest firm hoping a cheaper inflation index will cut pension costs. David Prosser reports.
28 Aug 2019
How the pandemic has affected your pension scheme
Pensions

How the pandemic has affected your pension scheme

It’s time to review the effect of Covid-19 on your retirement savings and take any necessary action.
30 Jun 2020
Should the pensions triple lock be scrapped?
Pensions

Should the pensions triple lock be scrapped?

The pensions triple lock had been a key plank of the government’s offer to older voters, but the promise to gold-plate the state pension is looking in…
27 Jun 2020
Have you been furloughed? Here's how it could hit your pension entitlement
Pensions

Have you been furloughed? Here's how it could hit your pension entitlement

Your pension savings could be squeezed by the state's furlough scheme – and its withdrawal.
16 Jun 2020

Most Popular

House price crash: UK property prices are falling – so where next?
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020
How “support” and “resistance” can help you spot trading opportunities
Sponsored

How “support” and “resistance” can help you spot trading opportunities

Technical analysis can help traders manage risk and decide where to enter and exit a trade. One simple form of technical analysis is the concept of “s…
6 Jul 2020
The end of the bond bull market and the return of inflation
Inflation

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020