State pension will increase in 2023 by 10.1 percent

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State pension: Pensioner asks ‘who’s going to pay?’

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The state pension increases every year to help pensioners keep up with rising costs. The next boost will come into effect in April 2023, meaning retirees need to wait just a few more months before their weekly income is boosted.

Those on the full new state pension will see their weekly payments increase from £185.15 a week to £203.85 a week. This is an increase to £10,600 over the year. People who were contracted out before April 6, 2016 may not receive the full sum.

Pensioners on the full basic state pension will also get a payment boost with their payments increasing from £141.85 a week to £156.20. Anyone who reached state pension age before April 2016 would get £8,100 for the year.

However it should be noted these figures are for the full state pension.

If people don’t have a complete National Insurance record then they won’t be entitled to the full amount.

The future of the triple lock was hanging in the balance for months, but the Treasury has confirmed that the state pension will rise in line with inflation in April for 2023-24.

The ‘triple lock’ refers to the idea that the state pension rises in line with the highest of these three measures every year:

  • A flat 2.5 percent rise 
  • Average earnings growth (measured from May to July each year)
  • Inflation (measured in the year from September every year)

This means the state pension will rise in line with September’s inflation rate – 10.1 percent.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, warned pensioners face a tough winter before they receive the payments boost.

She said: “After weeks of speculation about whether the triple lock would return next year, many pensioners will be viewing the news with a sigh of relief.

“Soaring inflation has brought chaos to people’s finances this year and a 10.1 percent increase along with the extra cost of living payments of £300 will be hugely welcome for pensioners struggling to keep up with their bills.

“However, it’s also worth saying that this increase will only come into effect from April so there is a tough winter ahead and the Chancellor has been forthright in saying that times will be difficult for everyone.

“The reinstatement of the triple lock after its suspension last year will cool some of the discussion around its long-term viability for a while, but with a review of state pension age due to be published soon, now is the time to carry out a comprehensive review of the state pension to ensure it best helps those who need it most, both now and into the future.”

As the cost of living crisis continues, pensioners are urged to check they are getting the benefits they are entitled to as any extra cash could be vital for families on low incomes.

The Chancellor also announced that benefits including Pension Credit are also set to increase by 10.1 percent.

Pension Credit provides support for people over state pension age on low incomes.

Guarantee Credit can now top up one’s income to at least £182.60 per week for single people.

Next year it is increasing by £18.45, to £201.05, equivalent to £804 a month or £10,454 annually.

Guarantee Credit for couples is worth £278.70 for couples however this will increase by £28.15 a week to £306.85, equivalent to £1,227 a month or £15,956 a year.

Savings Credit is £14.48 extra per week for single people, which will increase to £15.94 in 2023 or £16.20 per week for couples, which is increasing to £17.84 weekly.

For more information people can visit the Government website.

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