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How much the State Pension pays in 2022/23

How much the State Pension pays in 2022/23

Those on the UK State Pension have received a moderate pay rise in April 2022. Read on to see how much the New and Basic State Pensions pays in 2022/23.

lovemoney staff

Investing and pensions

lovemoney staff
Updated on 6 April 2022

The amount the UK State Pension pays has just increased 3.1% as the new tax year begins. 

It means hard-pressed pensioners will enjoy a 2022/2023 State Pension pay rise of up to £289.

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 much you can expect to receive and how the State Pension increases are calculated.

But first, if you're retired and struggling to make ends meet, make sure you are receiving all these vital credits and benefits that you are entitled to.

If you still need help bringing in extra cash after you've finished working, take a look at this guide to boosting income in retirement.

Triple lock paused: how the 2022 State Pension hike was calculated

In a normal year, the rate at which the State Pension increases the following year is usually 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 in September, and 2.5%.

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

However, 2021 was obviously anything but normal.

With wages taking such a hammering last year, the wage growth figure for July 2021 had surged far higher than it would in normal conditions as some semblance of normality returned to the market.

While this would have meant a very welcome bump to pensioners monthly budgets, the Government deemed it unaffordable in the current Covid-ravaged climate.

As a result, it has temporarily paused the triple lock and stripped the wage element out of the 2022 State Pension pay rise calculations.

It's worth noting the Government offered no guarantees that the triple lock would be back in 2023 – we'll be monitoring the situation and will let you know as soon as any information becomes available.

So how does this affect the State Pension pay rise for the 2022/23 financial year? 

Once wages are stripped out, inflation was the highest figure at 3.1%, so this is the increase that has been applied.

While retirees will no doubt be disappointed at missing out on a bumper pay rise - especially given the cost of living crisis that's unfolding - it's worth noting the new increase is at least higher than last year's 2.5% rise. 

We'll look at how much this works out to in pounds and pence, but first, we should point out that not all pensioners receive the same amount.

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.

There's the old Basic State Pension and the New State Pension, which pay two significantly different amounts.

The old pension is given to anyone who retired before April 2016 and is worth notably less than those who retire on the new State Pension.

How much the New State Pension pays in 2022/23

As mentioned earlier, the New State Pension pay has risen 3.1% in April 2022. 

This has seen payments rise from £179.60 a week last financial year to £185.17 for 2022/23, meaning annual incomes have increased from £9,339 a year to around £9,629.

How much the old Basic State Pension pays in 2022/23

The weekly Basic State pension has risen by £4.26 a week, taking it to £141.86. 

This means you'll see your annual pay rise from £7,157 to around £7,376 during the 2022/23 financial year.

Past State Pension changes

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

 

How State Pension has risen in previous years

April 2017

2.5%

April 2018

3%

April 2019

2.6%

April 2020

3.9%

April 2021

2.5%

April 2022

3.1%

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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