State pensioners in the UK will receive a significant boost to their monthly payments from April 2024, thanks to the Triple Lock system. The government increases pensions annually based on inflation, wage growth, or a flat 2.5%—whichever is highest.
This year, wage growth (4.1%) exceeded inflation (1.7%), meaning pensions will rise in line with wage growth.
How Much Will the State Pension Increase?
From April 2024, the state pension rates will increase as follows:
- New State Pension (for those who retired after April 2016)
- Current weekly rate: £221.20
- New weekly rate: £230.25
- New monthly rate (4-week period): £1,281
- New yearly total: £11,973
- Basic State Pension (for those who retired before April 2016)
- Current weekly rate: £176.45
- New weekly rate: £169.50
- New yearly total: £8,814
Will You Pay Tax on Your State Pension?
- The Income Tax threshold for 2024-25 remains at £12,570.
- If state pension is your only source of income, you will not pay tax.
- If you earn over £12,570 from other sources (workplace pensions, rental income, or side jobs), you will pay 20% tax on every £1 over the threshold.
- The threshold has not increased, meaning some pensioners may soon become taxpayers if state pensions continue rising.
Who Qualifies for the State Pension?
- Currently, you must be at least 66 years old with at least 10 years of National Insurance (NI) contributions.
- The state pension age will rise:
- 67 by 2036
- 68 by 2046
The April 2024 state pension increase offers welcome financial relief for retirees, but the unchanged tax threshold may soon push more pensioners into the tax bracket. With the state pension age set to increase, future retirees should plan accordingly.
FAQ’s
How much is the state pension increasing in April 2024?
The full new state pension will rise to £230.25 per week (£1,281 per month), and the old basic state pension will increase to £169.50 per week.
What is the Triple Lock system?
The Triple Lock guarantees that pensions increase each year by the highest of inflation, wage growth, or 2.5%. In 2024, pensions will rise by 4.1% due to wage growth.
Will I have to pay tax on my state pension?
If your total income exceeds £12,570 (including workplace pensions or other earnings), you will pay 20% tax on income above this threshold.
Who qualifies for the UK state pension?
You must be at least 66 years old and have a minimum of 10 years of National Insurance contributions.
When will the state pension age increase?
The state pension age will rise to 67 by 2036 and to 68 by 2046.
