The amount people get in state pension payments from next April has been confirmed by Chancellor George Osborne today, while he also revealed those who leave the UK for more than four weeks at a time will no longer receive pension credit or housing benefit.
Here's what's happening from April 2016:
- Basic state pension: This will rise to a maximum of £119.30/week from £115.95/week at present. This is in line with the Government's 'triple lock' guarantee, which states the basic state pension will rise by either 2.5%, by September's Consumer Prices Index figure or by average earnings, whichever figure is higher. This time it rose by average earnings. Those who reach state pension age before 6 April next year get this.
- New 'single tier' state pension: Those who reach state pension age on or after 6 April 2016 will get £155.65/week if they have the full 35 year's of National Insurance contributions. The amount you get can be higher or lower depending on your National Insurance record. This rate is higher than the basic state pension as those who get it will get just one state pension payment, while those on the basic state pension may also get the additional state pension. Full info on the different types in our State Pensions guide.
Pension credit and housing benefit restrictions
Meanwhile from April 2016, recipients of pension credit and housing benefit will no longer get it if they leave Great Britain for more than four consecutive weeks – currently this cut off point is 13 consecutive weeks.
This will impact those who go on a long holiday or have a holiday home abroad. However, those who go away due to exceptional circumstances (eg, a relative's death) won't be hit, as long as they're back within 26 weeks.
Pension credit is an extra payment that guarantees most people over 62 a minimum income. It comes in two parts: the first part is a guaranteed top up for everyone, but how much you'll get for the second part will depend on how much you have in savings. See our Pension Credit guide for more on how it works.