How much the State Pension will pay in 2019/20

The amount the State Pension pays has increased for the 2019/2020 tax year – here's how much it is worth.

The amount the State Pension pays has increased by 2.6% from 6 April 2019.

It means retirees on the New State Pension will receive £168.60 a week, while those on the Basic State Pension will get £129.20.

The rest of this article explains more about the State Pension: for those who want to learn more about retirement planning, head over to our comprehensive guide to pensions.

How much the new State Pension pays is down to the triple lock

At present, the rate at which the State Pension increases is calculated by what's known as the triple lock system.

In short, this is the greater of annual price inflation as measured by the Consumer Price Index (CPI), earnings growth or 2.5%.

In terms of inflation, it is last September's figure (which has just been announced) that is key. So while retired households are generally looking for inflation to be rock-bottom, this month is the exception.

With average wage growth – one of the other aspects of the triple lock – sitting at 2.6%, the fact that inflation stood at 2.7% in August 2018 made it the most likely figure to drive State Pension increases for 2019.

However, the figures were surprisingly low, dropping from 2.7% to 2.4% off the back of lower food and drink prices.

As a result, it is the 2.6% wage growth figure that determined this April's State Pension pay rise.

The New State Pension: what it pays in full

Pensioners entitled to the full new State Pension will see their weekly payments increase by £4.25 from £164.35 this tax year to £168.60 from April 2019.

The change means they will receive an extra £221 by the end of the tax year, with total annual income boosted from £8,546.20 to £8,767.20.

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What the old Basic State Pension pays

Those that receive the full old Basic State Pension have also seen their payments increase by £3.25 a week, rising from £125.95 in 2018/19 to £129.20 in 2019/20.

The 2.6% increase means that, annually, these pensioners got a total of £6,549.40 during the past tax year compared to £6,718.40 in 2019/20 – a rise of £169.

Of course, this is in pure cash terms: the eroding effects of inflation could mean you will be no richer – or even poorer – in real terms, depending on your spending habits.

Receive Pension Credit? That's going up too

Those pensioners on lower incomes who get Pension Credit will receive an increase of 2.6%.

Past State Pension changes

Here’s how the State Pension has been uprated over the last seven years.

 

How State Pension was uprated

Which part of the triple lock kicked in?

April 2011

4.6%

Inflation (RPI)*

April 2012

5.2%

Inflation (CPI)

April 2013

2.5%

Guaranteed minimum

April 2014

2.7%

Inflation (CPI)

April 2015

2.5%

Guaranteed minimum

April 2016

2.9%

Average earnings

April 2017

2.5%

Guaranteed minimum

April 2018 3% Inflation

*Change of index from RPI to CPI for the inflation part of triple lock was delayed for the State Pension until April 2012 (see 2.33 of the 2010 Budget book if you want the full details and have a lot of time on your hands)

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More from loveMONEY:

State Pension: 6 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

loveMONEY election manifesto: scrap the State Pension triple lock

 

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