Key Points

  • The new financial year will bring new rates for millions of taxpayers, Universal Credit claimants and those on the state pension
  • The DWP confirmed last year that pensioners will see their incomes rise by 2.5% as the new tax year kicks in
  • However, the overall amount you receive at retirement will depend on your national insurance credits.

State pensions payments will rise for millions of retirees from April when new rates come into force across England and Wales.

The new financial year will bring new rates for millions of taxpayers, Universal Credit claimants and those on the state pension.

The department for Work and Pensions (DWP) – which sets the rates – said pensioners will see their incomes rise by 2.5% as the new tax year kicks in.

The triple lock is designed so that it rises with wages, inflation the previous September, or 2.5% – whichever is highest. This year, wage inflation fell, inflation was 0.5% in September, so pensions are rising 2.5%.

State pension recipients who are entitled to the full level of new single-tier state pension will get £179.60 a week from April 12, 2021 – an increase of £4.40 on the current rate of £175.20. This equates to an extra £17.60 a month and £228.80 for the 2021/22 financial year.

Those who reached state pension age before April 2016 receive the basic. State pension. At its full level this is worth £134.25 a week, rising to £137.60 next year.

The increase equates to an extra £13.40 a month and a £174.20 pay rise in 2021 – 22, taking the total over a year to £7,155.20.

However, the overall amount you receive at retirement will depend on your national insurance credits. To qualify for the full amount, you need to have amassed 35 credits over your working life – that’s 35 years of work. For the full basic State Pension, you need 30 qualifying years.

Helen Preece
Helen Preece

Helen Preece runs The Financial Management Centre in Brighton. Helen is a CIMA qualified accountant with over 15 years of accountancy and bookkeeping experience. Having previously worked in audit, practice and industry she feels she has varied experience that can be applied to all clients. Helen understands that for small business the finance and bookkeeping side is not normally the first thing on the business owners ‘To Do’ list.