Pension 2018: Changes in April sees state pension increase – how much will it go up? | Retirement | FinanceHeat Profit
he State pension is set to rise from April 6, 2018. How much you get paid weekly will depend on your National Insurance record.
If you reached State Pension age before 6 April 2016, you’ll get the basic State Pension but those who reached pension age on or after this date will get the new state pension under the new rules.
The new rules affect men born on or after April 6, 1951 and for women born on or after April 6, 1953.
If you were born before these dates you will get the old State Pension – the basic state pension – instead.
READ MORE: State pension increase 2018: When will it rise this year?
State pension increase – how much more could you get?
State pensions will rise three percent – so eligible pensioners will see their weekly payments increase by around £5 per week
The most you can currently get from the basic State Pension is £122.30 a week.
But after April 6 this year, the increase will see the state pension rise to £125.97 per week.
Pensioners who are entitled to the full new state pension will see their payments increase from £159.55 to £164.35 per week.
Why will the State Pension increase?
The basic State Pension increases every year by whichever is the highest of the following: the average percentage growth in wages in the UK; the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI); or 2.5 percent.
September inflation rates are used by the Department for Work and Pensions to set how much pensioners receive from the start of the new tax year.
State pension increases are protected by the “triple lock”, which means payments rise by the higher of the three so pensioners never miss out on an increase.
As inflation this year is higher than both earnings and 2.5pc, the lock will be set at 3 percent.
This means pensioners are entitled to an extra £4.78 a week to the full state pension of £159.55 a week.
Over the course of a year, pensioners will receive an extra £248.56 as a result as the total sum reaches £8,545.50..
If you live abroad, however, the state pension only increase if you live in the European Economic Area (EEA), Gibraltar or Switzerland or a country that has a social security agreement with the UK.
The state pension does not increase if you live in Canada, New Zealand or Australia.