Pension increase: how much the State Pension pays in 2021

Those who receive the State Pension have received another inflation-beating increase as of today (April 6). Read on to see how much the New and Basic State Pensions are worth in 2021/2022 tax year.

Anyone who receives State Pension has increased by an inflation-busting 3.9% from today thanks to the 'triple lock' measure that guarantees a minimum level of increase each tax year. 

It means hard-pressed pensioners will enjoy a 2021/2022 State Pension pay rise of up to £230.

But exactly how much pension you receive will vary based on a number of factors. 

The rest of this article looks in more detail at how the State Pension increases are calculated and what you can expect based on when you retire.

For those who need help bringing in extra cash after they've finished working, take a look at this guide to boosting income in retirement.

How the State Pension triple lock works

As we mentioned earlier, the rate at which the State Pension increases is currently calculated by what's known as the triple lock system.

In short, this means looking at the three figures of annual wage growth to July, inflation as determined by the Consumer Price Index (CPI) in October, and 2.5%.

Whichever is the highest is the one that'll determine the following year's State Pension increase.

In 2019, annual wage growth was by far the highest at 3.9% – inflation came in at 1.7% – so this was the figure applied to the 2020/2021 State Pension.

By contrast, the difficulties of 2020 played havoc with both wages and inflation.

Inflation for last October came in at just 0.5%, while average earnings in the three months to July actually dropped by 1%. 

That is why the 2.5% ‘lock’ has come into play, meaning that is how much the State Pension increased by from April 2021.

Next year could see pensioners in line for a particularly large increase if workers' wages do indeed rebound as expected.

That would no doubt increase calls for the way in which pension increases are calculated to be changed, explained Helen Morrissey, pension specialist at Royal London. 

"While the triple lock plays an important role in safeguarding pensioner incomes, it will leave Government with a headache next year," said Morrissey. 

"With wage growth expected to rebound, we could see pensioners receiving record rises in state pension which will stretch Government purse strings even further.”

 What happens next remains unclear, so for now, let's on what the State Pension and the latest increase means in pounds and pennies.

Which State Pension are you eligible for?

As a result of our convoluted and, some would say, unfair welfare system, there are two different State Pensions: the old Basic State Pension and the New State Pension, which pay two significantly different amounts.

How much the New State Pension pays from 6 April 2021

Given the State Pension increased by 2.5% as of today (6 April), those receiving the full New State Pension will see their weekly payouts increase by £4.40 per week, taking them to £179.58.

As a result, that means they will receive an extra £228.80 by the end of the 2021/22 tax year, which works out as an annual income boost from £9,109 to £9,337.80.

How much the old Basic State Pension pays from 6 April 2021

How much the Basic State Pension will pay (Image: Shutterstock)

How much the old Basic State Pension pays in 2021/22

From today, the weekly pension will rise by £3.40 a week, taking it to £137.65. 

That works out as an annual increase of £176.80, taking the annual income from £6,980.37 to a total of £7,157.17.

Past State Pension changes

Here’s how the State Pension has increased over the last few years.


How State Pension was uprated

Which part of the triple lock kicked in?

April 2012


Inflation (CPI)

April 2013


Guaranteed minimum

April 2014


Inflation (CPI)

April 2015


Guaranteed minimum

April 2016


Average earnings

April 2017


Guaranteed minimum

April 2018



April 2019


Wage growth

April 2020


Wage growth

April 2021

2.5% Guaranteed minimum

Boosting your pension income

If you're struggling to make ends meet in retirement, it's vital you ensure you're getting all the help you're entitled to from the Government.

Sadly, it's pensioners on low incomes who are most likely to miss out in this regard, so we've put together this checklist of vital credits and benefits people can get in retirement.

If you've gone through the list and are still struggling financially, take a look at this guide to boosting your income in retirement and this piece on clearing debt

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More from loveMONEY:

State Pension mistakes that impact how much you get paid

Deferring your State Pension: how much can you get and is it worth it?

Find out how much you need to save for retirement



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