Some individuals are set to see a much smaller boost.
State pensioners born before 1951 face £135 blow (Image: Getty)
New state pension rates confirmed for next year could mean that some retirees will get lower payments than others. The UK has two types of state pensions: the basic state pension and the new state pension. Those who retired before April 2016 are still on the older plan, and those on the full rate of this plan will see a £440 increase to their state pension next spring.
However, those who retired later and are on the new state pension will get a £575 boost, marking a £135 difference. The new plan is already worth approximately £3,000 more than the older version, and its annual increase exceeds that of the old version under the triple lock.
The new pension scheme pays more (Image: Getty)
While some pensioners will be receiving more than others, it doesn’t necessarily mean that older households will be worse off. There are other top-up payments through the State Earnings-Related Pension Scheme (SERPS) that can boost pensioners’ monthly incomes.
While men born before April 1951 and women born before April 1953 receive the basic state pension, it will eventually be phased out, and everyone will transition to the new version, which will be a single payment.
New rates for next year have been determined by the triple lock policy, in which state pension increases by whichever is highest out of inflation, wage growth and 2.5%.
As wage growth was the highest of the three metrics at 4.8%, the new state pension is expected to rise by £574.60, and the basic state pension by £439.40 in April 2026. This will bring the annual amount for each full pension rate up to £12,547.60 a year and £9,614.80 a year, respectively.
To receive the new state pension, you must claim it, and you can do this online, by phone or by post.
To claim, you will need the date of your most recent marriage, civil partnership or divorce, dates of any time spent living or working abroad, your bank or building society details, and any social security numbers that you have for foreign state pension schemes.
Those applying online will also need the invitation code from the letter about getting your State Pension. If you haven’t received one, but you are within three months of reaching State Pension age, then you can request one on GOV.UK.
To qualify for any state pension rate, people must have at least 10 qualifying years on their National Insurance (NI) record. The number of qualifying years on this record is used to determine how much state pension a person will receive, but usually, to get the full rate, a person should have around 35 years.
People accumulate NI years through active employment or by receiving NI credits, which are granted during periods of unemployment, illness, or while fulfilling parental or caregiving responsibilities. Those who have gaps in their records, which may have occurred when credits weren’t claimed, can increase their state pension by purchasing additional NI years to fill these gaps.
HM Revenue and Customs (HMRC) and the Department for Work and Pensions (DWP) offer an online state pension forecast service to help people calculate if they’ll benefit from making voluntary contributions.
