UK state pension is anticipated to rise 4% in April 2025
The UK state pension is expected to rise by 4% in April 2025, meaning pensioners will receive an additional £460 next year.
How is the state pension changing?
The full new state pension is worth £221.20 per week (£11,502 a year), and this is expected to rise to £230 a week (£11,962), while the basic state pension (£8,814 a year) will rise to £9,167.
Under ‘triple lock’ rules, the state pension must increase by the higher of inflation, average earnings growth, or 2.5%.
As inflation was 2.2% in July and is expected to reach 2.75% in the second half of this year, it’s unlikely to exceed average earnings growth, including bonuses, which is 4% in the three months to July.
Why millions of pensioners could lose up to £300
While the increase in the state pension is welcome news, the cut in the winter fuel payment for those not claiming pension credit means over nine million pensioners could lose up to £300.
The new state pension would also not be far off the personal allowance (£12,570), which is frozen until 2028, so pensioners are more likely to pay tax on any additional income.
“Although the increase to the state pension should help meet next year’s bills, it doesn’t help those who will be living close to the edge of their means this winter,” says Rachel Vahey, head of public policy at AJ Bell.
“The triple lock guarantee has worked well in the favour of pensioners over the recent past, boosting the state pension by 28% over the last four years.
“But with the state pension edging ever closer to the frozen personal allowance of £12,570 and the concept of universal payment coming under increasing scrutiny, the government will have to take the bull by the horns at some point to address who should get the state pension, at what age, and how much,” Vahey added.
Need help with retirement planning?
While the state pension can offer some income in retirement, it’s usually not enough to live off alone, and should instead be seen as a boost to your income.
That’s why it’s important to have workplace or private pension pots you can use to ensure you have enough money in retirement.
Retirement planning can be daunting, but a qualified financial adviser can look at your circumstances and future plans and help ensure you have enough money for your golden years.
Unbiased can quickly match you to a financial adviser who is regulated by the Financial Conduct Authority (FCA).
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