The DWP has confirmed pension changes for April (Image: Getty)
State pensioners will be handed a bumper boost to their monthly payouts from April thanks to the .
Every year, the government has committed to increasing benefits in line with inflation. For pensions, though, the sees pensions increase by one of three possible metrics: inflation, wage growth or a flat 2.5%, whichever is highest. Wage growth was 4.1% while inflation was just 1.7% in the past year, so it’s wage growth that will boost pensions this April. From April, the full new is going up from £221.20 per week to £230.25, or £1,281 per month in a four-week month.
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The old basic , for those who retired before 2016, will increase by the same percentage, but goes from £176.45 per week to £169.50. It means that a state pensioner on the full new will collect £11,973 per year, and a pensioner on the old basic will get £8,814 per year.
Income Tax kicks in at £12,570, so those who have no other income apart from the in a given year will not pay any tax on their pension.
Those who do have other income – such as a private workplace pension, a second property rental or a side hustle – will have to pay 20% Income Tax on every £1 above £12,570 they collect. This threshold has not been raised for the 2025-26 tax year, and pensioners on the new will be within touching distance without earning any other income.
Right now, the is paid out to anyone aged over 66 (who has a minimum of 10 years of National Insurance records), but the age is due to increase to 67 by 2036 and 68 by 2046.
Those who are only on the old basic can increase their payouts closer to the full amount. Those who earn less than £218 a week in retirement – so everyone on the old basic pension who doesn’t have a private pension – can apply for Pension Credit.
As well as making you eligible for various benefits like Winter Fuel Payments, Pension Credit also tops up your income to almost the same amount as the full .