State pension changes TOMORROW – how can you increase what you will get?
State pension payment amounts will increase as of tomorrow.
This is due to the new tax year, and the triple lock which keeps state pensions inline with inflation and rising living costs.
The pension is increase by whichever is higher, the rate of inflation – as measured by the Consumer Prices Index (CPI), or average earnings growth, or 2.5 per cent.
This year it will rise by 2.6 per cent.
State pension news: How to increase what you will get? Changes tomorrow
For those collecting the basic state pension, it will rise from £125.95 per week to £129.20 from Saturday. This is an additional £3.25 per week.
The new state pension currently pays out £164.35 each week. This will rise by £4.25 to £168.60 as of this weekend.
How can you increase your state pension?
Delaying your state pension can boost your payments
Experts at PensionBee told Express.co.uk delaying your state pension by just a few weeks could result in you receiving a higher weekly state pension amount, or even a lump-sum payment.
They said: “The amount you’ll qualify for depends on when you reach state pension age.”
If you reached state pension age before 6 April 2016
Your state pension will increase by around 1 per cent for every 5 weeks you defer, totalling 10.4 per cent for every full year.
For 2018/19, the basic state pension is £125.95 a week or £6,549.40 a year. If you delay taking your pension for just one year your state pension will rise to £139.05 a week, or £7,230.60 a year.
If you reached state pension age before 6 April 2016 you could qualify for a lump sum payment if you defer claiming your state pension for a minimum of 12 months.
That means you could take a lump sum of around £6,713 (including interest of 2 per cent above the Bank of England base rate), when you defer the basic state pension of £125.95 a week for a year.
Pensions: Everything you need to know
Pensions: Everything you need to know about your pension.
How much should I put in my pension?
If you reached state pension age after 6 April 2016
If you’ve reached state pension age relatively recently, you’ll see less of an increase as the new state pension is already higher than the basic state pension amount referenced above. Your state pension will increase by around 1 per cent for every 9 weeks you defer, totalling 5.8 per cent for every full year.
If you receive the new state pension of £164.35 a week or £8,546.20 a year in 2018/19, your pension will rise to £173.89 a week, or £9,041.88 a year when you defer taking your pension for a year.
If you receive housing benefit or pension credit, it’s worth noting that these benefits may be affected by any additional pension income. But, if you qualify for a lump-sum payment your benefits won’t be affected.
Shock news this week found that half a million pensioners losing up to £4,000 from their state pension.
This is because they are claiming it while still working, paying a tax that has been deemed “unnecessary” by mutual insurer Royal London.
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