From 6 April 2020, the State Pension, for those who reached their State Pension Age on or after 6 April 2016 will rise by 3.9% to £175.20 a week (£9,110.40 a year).
For those who reached their State Pension Age before 6 April 2016, they will see their Basic State Pension also increase by 3.9% to £134.25 a week (£6,981.00 a year). These individuals may also receive an additional pension from the State in respect of the State Second Pension (S2P), formerly called the State Earnings Related Pension Scheme (SERPS). The amount they receive will depend on their earnings before reaching their State Pension Age. Some members may receive some of this additional State Pension as part of the pension they receive from any company pension arrangement they have.
Increases to the New State Pension and Basic State Pension are calculated as the greater of:
This is often referred to as the ‘triple lock’. This year the National Average Earning index produced the highest of the three potential increases with an increase of 3.9%.
For those members who reached their State Pension Age before 6 April 2016, the increase to any additional State Pension they receive, above the Basic State Pension, is calculated using the rate of inflation only. Therefore the increase to this part of their State Pension will be 1.7%.
The Adult Dependency Increase (ADI), which is paid to some as part of their State Pension, will cease to exist from 6 April 2020. ADI is paid to pensioners with a financially dependent spouse but since 2010, the Government has been gradually phasing it out. Members who are currently receiving the ADI as part of their State Pension may be eligible to apply for Pension Credit or Universal Credit. You can find more information on the HMRC website.
Click here to open the page on the HMRC website which explains State Pensions in more detail.