Older state pensioners will be handed a nice little cash boost.
Older state pensioners will be handed £375 (Image: Getty)
Older state pensioners will be handed a confirmed £375 cash boost by the DWP, the Secretary of State for Pensions has announced.
Following the triple lock being kept for at least three more years in the Autumn Budget, the minister has now announced the cash boosts which will be handed to state pensioners from next April. Older state pensioners are classed as those who hit state pension age before April 6, 2016.
The new state pension will be increased by ‘around £375’, the Secretary of State for Pensions Pat McFadden has confirmed, thanks to the latest triple lock boost. The triple lock is the mechanism by which pensions are increased by the highest of three metrics; inflation, wage growth or a flat 2.5% and despite the plan to axe the triple lock in 2030, it will still increase pension payments in 2027, 2028 and 2029.
New state pensioners have also been given the same triple lock, but their basic payments are higher, so the cash boost is higher, at £490.
Delivering a statutory review for Parliament following the Budget, Pat McFadden wrote: “I am pleased to announce that the basic and full rate of the new state pensions will be increased by 3.9%, in line with the increase in average weekly earnings in the year to May-July 2026.
“This delivers on our triple lock commitment throughout this Parliament to increase these rates in line with the highest of growth in prices, growth in earnings or 2.5%. From April, the full annual rate of the new state pension will increase by around £490. The full annual rate of the basic state pension will increase by around £375.”
The boosts represent the maximum amount that the state pension will increase for a state pensioner with a full National Insurance record.
3 extra payments state pensioners could be entitled to
At the same time, Chancellor John Healey has announced the new Pensions Tax Allowance. A policy first announced by Rachel Reeves, it has now been fleshed out, with details of how it will work. It means that state pensioners receiving the full new state pension will not pay tax on it, despite the amount hitting £13,036 per year, which would exceed the £12,570 Personal Allowance tax threshold. Any income under £13,036 will be tax free, including the pension but also savings, property income and salary.