State pension payments will rise by 10.1 percent on April 10, but some could get an even higher boost. The state pension rises each year under the triple lock mechanism, whichever is the highest of: 2.5 percent, inflation or average earnings.
Under September 2022’s CPI inflation figure, this means a rise in state pension payments of 10.1 percent for both the old and new schemes.
However, a strange “quirk” in the system means a bigger rise in payments is on the way for many retirees.
This could be as high as 20 percent, providing a welcome boost to those affected.
The rule specifically relates to those who retired before 2016 – who are in receipt of the older scheme known as the basic state pension.
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Those who retired before this date have a state pension made up of two parts: a basic state pension and the additional state pension.
The additional state pension is also commonly known as the state second pension or SERPS, of which many people will be familiar.
The Government describes it as “extra money on top of your basic state pension”, and people get it automatically if they are eligible, unless they have contracted out.
This pension applies to rights a person may have built up, usually while working, between 1978 and 1979 and 1996 to 1997.
Under SERPS, the most a person can receive on top of their basic state pension is £185.90 weekly.
However, from April 10, this will rise to £204.68.
According to consultancy Lane Clark Peacock (LCP), this increase could provide pensioners with a pay rise of up to 20 percent.
Sir Steve Webb, partner at LCP, told The Telegraph: “It would affect people who were in a ‘contracted out’ workplace pension for a long period of time after 1978 when SERPS started, such that the guaranteed minimum pension (GMP) wiped out the SERPS pension they would otherwise have built up over that period.”
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Ahead of the April 10 rise, many pensioners will want to know how their sum is set to increase.
State pension 2023/24 rates
The full new state pension will rise from £185.15 to £203.85 weekly. Some may get less if they were contracted out before April 6, 2016.
The old, basic state pension will rise from £141.85 to £156.20 per week.
The married woman’s, or Category B, basic state pension will increase from £85.00 to £93.60 a week.
Finally, the Category C or D non-contributory state pension will also increase from a weekly payout of £85.00 to £93.60.
Some state pensioners will receive an early payment tomorrow, as it is the last working day before the Easter bank holiday weekend.
Those expecting payment on Friday, April 7, or Monday, April 10, may receive their sum on April 6.
This is because Good Friday and Easter Monday impact the DWP’s opening hours.
If individuals are affected, they will not have to take any action as payments should be issued automatically.
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