The state pension increase will see pensioners get a pay rise from April 6 this year. Approximately 13 million people will receive up to £221 extra as they collect their state pension. The 2.6 percent increase came following September’s inflation figures.
But it won’t be good news for everyone, with the age you can collect your state pension being about to go up.
The state pension age is currently 65 for men and is gradually increasing for women from 60 to 65.
However, from 2019, the state pension age will increase for both men and women to reach 66 by October 2020.
Tom Selby, of New Model Advisor, said: “Despite the gradual transition, for many this will be extremely painful as they consider working longer or spending less money in retirement.”
The Government is also planning further increases, which will raise the age from 66 to 67 between 2026 and 2028.
An Age UK survey shows 58 percent of people feel negative about the new changes.
Are you affected?
The latest changes to the state pension age affect people born from December 6, 1953 onwards.
This means people who celebrated their 65th birthday from early December 2018 will now have to wait longer to claim their state pension.
According to a survey by Age UK, 58 percent of people feel negative about the changes while only seven percent feel positive.
How much will state pension pay?
The state pension will rise by approximately £4.25 a week or £221 a year from April.
This means the full state pension will be worth £168.60 per week after rising from £164.35 a week.
The basic state pension, paid to people who reached state pension age before April 2016, will go up from £125.95 a week to £129.20.
How does the state pension work?
State pension is a weekly payment from the UK Government given to Britons who have reached state pension age.
To qualify for the state pension, you need to make NI contributions.
You now need 35 years of contributions to get the maximum state pension while the minimum claim is ten years.
If you pay more than £892 a week towards NI you will only pay two percent of the rest of your salary.
You can also choose to make voluntary NI payments, if you wish to contribute more.