RETIREES will see their state pension boosted by up to £230 a year from today.
The government confirmed last November that the state pension will rise by £4.40 a week, totalling a £228.80 increase over the year.
The state pension is a regular payment most people claim when they reach a certain age in later life.
It has been boosted from today thanks to the triple lock system, which is a calculation used to determine how much the state pension rises by each year.
It sees pension payments increase at the start of the tax year in April by the higher of average wages, the consumer prices index or 2.5% in the previous September.
The increase was confirmed after the consumer prices index (CPI) level of inflation remained low at 0.5% for September last year.
The move means the new state pension rises from £175.20 a week to £179.60 from today.
The old basic state pension increases by £3.40 a week from £134.25 a week to £137.65 – giving pensioners an extra £176.80 over 12 months.
The move is good news for retirees who would have likely seen their state pensions frozen this year if it wasn’t for the policy.
But not everyone gets the full rate and you need 35 qualifying years of national insurance payments to get the full figure.
Men born before April 6 1951 and women born before April 6 1953 also only qualify for the lower basic state pension.
Despite the boost rolling out from today Brits have been warned that the state pension still “won’t be enough” to get by financially when they retire.
Becky O’Connor, head of pensions and savings at Interactive Investor, told The Sun that the state pension might only be enough just to “scrape by”.
This is still the case even when the weekly state pension is set to rise above £200 a week in 2025.
Top tips to boost your pension pot
DON’T know where to start? Here are some tips from financial provider Aviva on how to get going.
- Understand where you start: Before you consider your plans for tomorrow, you’ll need to understand where you stand today. Look into your current pension savings and research when you’ll be eligible for the state pension, and how much support you’ll receive.
- Take advantage of your workplace pension: All employers are legally required to provide a workplace pension. If you save, your employer will usually have to contribute too.
- Take advantage of online planning tools: Financial providers Aviva and Royal London have tools that give you an idea of what your retirement income will be based on how much you’re saving.
- Find out if your workplace offers advice: Many employers offer sessions with financial advisers to help you plan for your future retirement.
Today’s rise marks the fourth time the 2.5% triple lock has kicked in since the policy was introduced in 2011.
But experts have warned that the triple lock scheme could be seen as expensive for the government and unfair for younger generations.
The payments cost the Treasury or the taxpayer money, with state pension payments making up around £100 billion of government spending.
But forecasts from the Office for Budget Responsibility suggest the triple lock could rise by as much as 4.6% in April 2022 based on wage growth in the coming months as lockdown restrictions ease.
It also predicts that state pension payments could hit more than £200 per week over the next four years based on the benefit rising by 2.7% in 2023, 2.5% in 2024 and 2.6% in 2025.
But while retirees get the boost, younger Brits face job cuts, pay cuts and furlough as a result of the ongoing Covid crisis.
But not all retirees are getting paid what they are due under scheme.
More than 74,000 married women could receive up to £23,000 after being underpaid their state pension for years.
The full scale of the pensions scandal was highlighted by This is Money and Sir Steve Webb last month – but average payouts have been now been published.
The investigation showed how 200,000 women in total didn’t get the hike in payments they were due.
The error affected elderly, widowed and divorced women who didn’t see their state pension rise based on their husband’s contributions.
Their payments should have gone up to 60% of their husband’s basic state pension, but thousands of women didn’t get the boost.
To work out if you’ve been underpaid, you can use this online tool created by Sir Steve, who is the former pensions minister, at lcp.uk.com.
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The rise comes as the pension age for men and women increased to 66 on October 6, up from 65.
For some women, this will be six years after they were originally told they would be able to claim their retirement fund aged 60.
We’ve rounded up everything you need to know about when you can retire in the UK and how you can claim a state pension.