New State Pension Rates Announced – Check Your Payments Now

New figures from the Department for Work and Pensions (DWP) reveal that 13 million people across the UK are now claiming State Pension, including 1.1 million in Scotland. The State Pension rates are set to increase from April 7, 2025, under the Triple Lock system, which ensures pension payments rise each year based on earnings growth, inflation, or 2.5%—whichever is highest. This year, the increase will be 4.1% based on earnings growth, affecting both the New State Pension (post-April 2016) and the Basic State Pension (pre-April 2016).

How Much Will the State Pension Increase in 2025?

The State Pension increase means higher weekly, monthly, and annual payments for retirees.

Full New State Pension (for those who retired after April 2016):

• Weekly payment: £230.25 (up from £221.20)
• Four-weekly payment: £921 (up from £884.80)
• Annual amount: £11,973 (up from £11,502)

Full Basic State Pension (for those who retired before April 2016):

• Weekly payment: £176.45 (up from £169.50)
• Four-weekly payment: £705.80 (up from £678)
• Annual amount: £9,175.40 (up from £8,814)

People receiving additional elements, such as deferred State Pension or other benefits, will see their payments increase by 1.7%, based on the September Consumer Price Index (CPI) inflation rate. To check how much your State Pension will be, use the State Pension Forecasting Tool on Gov.uk.

Future State Pension Increases Under the Triple Lock

The Labour Government has pledged to maintain the Triple Lock during its current term. According to forecasts, State Pension increases for the coming years are expected to be:

• 2025/26 – 4.1% (confirmed)
• 2026/27 – 2.5% (forecasted)
• 2027/28 – 2.5% (forecasted)
• 2028/29 – 2.5% (forecasted)
• 2029/30 – 2.5% (forecasted)

While the Triple Lock guarantees annual increases, future rises depend on inflation and wage growth trends.

How Many Pensioners Receive the Full State Pension?

According to Royal London, only half of pensioners receiving the New State Pension in 2024 received the full amount.

• Around 150,000 retirees are receiving less than £100 per week.
• Many pensioners may not have enough National Insurance (NI) contributions to qualify for the full amount.

If you are concerned about your eligibility, you can check your NI record and consider making voluntary contributions before the April 2025 deadline.

When Will Pensioners Receive Their Updated Payment Letter?

The DWP will send letters to all 12.9 million pensioners in March 2025, confirming their new State Pension payment rates. The letter will also encourage eligible pensioners to apply for Pension Credit, which can provide extra financial support for those on low incomes.

Will You Have to Pay Tax on Your State Pension?

The Personal Allowance (the amount you can earn before paying tax) will remain frozen at £12,570 for the 2025/26 financial year.

• If State Pension is your only income, you will not pay income tax.
• If you have additional income (such as private pensions or part-time work), you may need to pay tax.
• If your total income exceeds £12,570, you will be taxed at 20% on earnings above this threshold.

Important: If the State Pension increase in 2025/26 pushes your total income over the tax threshold, you will not receive a tax bill until July 2026, as tax on State Pension is paid one year in arrears. The 4.1% State Pension increase from April 2025 will provide a welcome boost for pensioners, with the full New State Pension rising to £11,973 per year. However, with the Personal Allowance frozen, some pensioners may need to pay tax if they have additional income. If you want to check your State Pension forecast, National Insurance contributions, or whether you qualify for Pension Credit, visit Gov.uk for more details. SOURCE

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