How Much Will The UK State Pension Increase In 2023?

UK State Pensions Set To Rise by 10.1% In 2023

The Rishi Sunak government will go ahead with the “triple lock” pension guarantee made during finance minister Jeremy Hunt’s Autumn address to the House of Commons in November. This means in the 2023/24 period, pensioners will see an increase of 10.1% on their state pension payments. 

The UK state pension is set to rise by more than 10% from April 2023 keeping in line with the country’s inflation levels from September. This comes after Chancellor Jeremy Hunt kept his word in the Autumn Statement to honour the “triple lock” commitment. 

Triple lock is a policy made by the UK government to decide by how much pension payments will increase in the new tax year. According to the model, the monthly payments will rise in tandem with whichever of the following three measures is highest; consumer price inflation taken from the rate during the previous September, average wage growth between May and July of the previous year, or baseline wage increase of 2.5%. 

The policy was suspended during the 2022/23 tax year and replaced with a “double lock” model to accommodate post-Covid rise in wages caused by people returning to work after being placed on furlough during the pandemic-induced lockdowns. 

UK State Pensions Set To Rise

There was rising concern that the Rishi Sunak government would continue the double lock policy maintained by the Boris Johnson and Liz Truss governments as the country is grappling with economic issues. Conservative MPs in the House of Commons warned against the decision for a second year running. However, Chancellor Hunt confirmed in his address to the parliament on November 17 that the “triple lock” would be reinstated and that pensioners will be paid in accordance with September’s CPI figure, which stood at 10.1% – one of the largest increases in over 40 years, which is much higher than average earnings of Britons or the 2.5% baseline.

The current basic state pension rate stands at £141.85 per week and the full state pension is £185.13 per week. 

With the triple lock applied, anyone receiving a base state pension will be eligible to get an extra £19 per week and anyone who reached the pension age before April 2016 will get an extra £14 per week with their full state pension. This will take the former to £8,100 per year or £156.20 per week, and the latter to £10,000 per year or £203.85 per week. This will be the first time state pension payments have gone above £10,000 a year. The Pension Credit Standard minimum for single and couple claimants will also increase by 10.1%, keeping in line with the inflation figures from September. The amount will be £201.05 for singles and £306.85 for couples, per week.

While the rate increase is good news for more than 12.5 million Britons that claim pensions from the UK government, it is still not on par with current inflation figures. In October, CPI numbers rose to a historic high of 11.1% before falling to 10.7% in November. This is still above the rate pensioners will be getting in the 2023/24 period. 

How much you can receive as a pension depends on your National Insurance (NI) record. In order to be eligible to receive the payments, you need to have at least 10 years worth of NI contributions, and to get a full state pension you will need 35 years. 

To qualify, you need to be:

  1. Employed and earning over £190 per week in 2022-2023 from a single employer and paying NI contributions
  1. Employed and earning between £123 and £190 per week in 2022-2023 from one employer and paying NI contributions.
  1. Self employed and paying class 2 NI contributions of £3.15 per week in 2022-2023
  1. Making voluntary NI contributions of £15.85 per week in 2022-2023
  1. Receive NI credits

To check how much state pension you should receive, visit www.gov.uk or the Department for Work and Pensions. 

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