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Full State Pension set to rise for most by £362 (4.1%) and benefits by 1.7% from April 2025 – here's what you need to know

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Emily White
Emily White
Senior News & Investigations Reporter
16 October 2024

The full State Pension is set to rise by £362.65 (4.1%) a year for most pensioners on 6 April 2025, under what's known as the 'triple lock' guarantee. Those on the full new state pension will see a rise of £474.85. Meanwhile certain benefits, including Universal Credit, are expected to increase by 1.7%.

It comes as the inflation figures that are factored in to calculating the rises were published today (Wednesday 16 October), though the Government is yet to officially confirm the changes – this is expected to happen in the upcoming Autumn Budget on Wednesday 30 October.

Martin Lewis: 'Most pensioners will get a far smaller rise than today's headlines suggest'

Martin Lewis
Martin Lewis
MSE founder & chair

Martin Lewis, founder of MoneySavingExpert.com, explained: While most headlines, and Government communications, will likely report next year's State Pension is to rise by £475 today – nearly double what an inflation increase would be – this doesn't reflect the reality on the ground for many.

That figure is for the full – new – State Pension, which only applies to the one in four who hit state pension age on or after 6 April 2016. The majority are still on its predecessor, the old State Pension, which is lower, and so the 4.1% rise of that is the smaller figure: £362.65.

Plus those figures only apply to those who get the full State Pension, which comes from having enough National Insurance (NI) years – usually around 35 (though it varies widely). Many, especially those on lower incomes don't have their full years, so get a lower pension and therefore their rise will be smaller still.

This is important to understand amidst the debate about the ending of a universal £200 to £300 pensioner Winter Fuel Payment, as most state pensioners get a smaller rise than the £475 most commonly quoted, and of course the rise won't hit until after winter anyway.

This is why spreading word about claiming Pension Credit – a State Pension income top-up – is so important for many on the lowest incomes, as it is now the key criteria for eligibility to the Winter Fuel Payments.

The biggest unanswered question, that I desperately hope will be addressed in the Budget, is about the roughly 800,000 of the very poorest pensioners who are eligible for Pension Credit but don't claim it. They are the most vulnerable this winter, very few get the full State Pension, so there is a dire protection gap that needs closing.

Why the State Pension is set to rise 4.1% from next April

The State Pension triple lock means it is set to go up each April by whichever is the highest of:

  • Average wage growth between the previous May and July (including bonuses) which was 4.1%

  • The previous September's Consumer Prices Index (CPI) inflation measure, which was 1.7%.

  • With a minimum rise of 2.5%.

As we today learnt the September's CPI rate of inflation, all figures are now in, which means the State Pension is likely to rise by the average wage growth figure of 4.1% (up from the previously reported 4% due to late data received by the ONS).

Here's how much the new State Pension is expected to rise by:

Boost to the NEW State Pension from April 2025

Year

Weekly payment

Annual payment (1)

2024/25 (current)

£221.20

£11,541.90

2025/26 (new – if increased by 4.1%)

£230.30

£12,016.75

Increase

£9.10

£474.85

(1) Calculated by dividing the weekly amount by seven to get the daily amount, then multiplying the daily amount by 365.25 (to account for leap years). State Pension payments are typically rounded up to the nearest 5p.

And here's how much the old basic State Pension – which you'll be on if you reached State Pension age before April 2016 – is due to rise by:

Boost to the OLD basic State Pension from April 2025

Year

Weekly payment

Annual payment

2024/25 (current)

£169.50

£8,844.30

2025/26 (new – if increased by 4.1%)

£176.45

£9,206.95

Increase

£6.95

£362.65

(1) Calculated by dividing the weekly amount by seven to get the daily amount, then multiplying the daily amount by 365.25 (to account for leap years). State Pension payments are typically rounded up to the nearest 5p.

Some benefit payments could rise by 1.7% from next April

Increases to certain benefits and Tax Credits, including Universal Credit, are also usually tied to September's CPI figure meaning increases of 1.7% are likely.

The benefits that usually rise in line with inflation are as follows:

- Attendance Allowance
- Carer's Allowance
- Employment and Support Allowance
- Income Support
- Industrial Injuries Disablement Benefit
- Jobseeker's Allowance
- Maternity Allowance
- Personal Independence Payment
- Statutory Maternity / Paternity / Adoption / Shared Parental Pay
- Statutory Sick Pay
- Tax Credits
- Universal Credit

The amount that can be taken off benefit payments in the form of deductions or sanctions could also increase from April 2025. The amount that can be deducted currently varies by benefit.

The amount you can reclaim for childcare costs if you get Universal Credit, and the overall benefits cap (the maximum amount you can get in benefits), don't usually rise with inflation. These go through a separate review process, and have stayed at the same level for the past few years.

What to do if you're struggling now

First, use our 10-minute benefits check to see what you could get and make sure you're not missing out on vital support.

It's also worth contacting your council to see what help it can offer. Under the Household Support Fund, which has been extended to April 2025, councils in England can access funding to help those most in need with the cost of daily essentials, including energy bills. Local authorities in Northern Ireland, Scotland and Wales run similar schemes, which will also receive additional funding.

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