As the financial advisors Middlesbrough clients trust, we are always up to date on vital information like pension rate changes. April 6th is the date for the beginning of the new tax year and with it comes changes to state pensions.
This rise comes from the annual boost and therefore increases how much retired people can receive. Some pensioners could see a £221 rise with a 2.6% increase to weekly payments. There are other changes for the 2019-2020 tax year too so we have included some of the rate changes below.
This is a weekly government payment that people who have hit the age for state pension can receive. You qualify if you make contributions through National Insurance. You have to make 35 years of contributions then you will receive the full amount.
Those who reached the age for state pension before April 2016 get the basic state pension and additional funds that they have built up. If you hit the age after April 2016, you get the new single-tier state pension.
Those who get the basic pension will receive a £3.25 weekly boost. This will bring payments from £125.95 to £129.20. Pensioners will therefore get an additional £169 across this tax year to bring annual income to £6,718.40.
People who get the full new single-tier state pension will see a £4.25 increase to weekly payments. This will take them from £164.35 to £168.60 for an extra £221 over the tax year and an overall £8,767.20 annual state pension income.
The single-tier and basic pension are protected by the ‘triple-lock’ guarantee. Because of this, they rise every year. This is depending on which of 2.5%, annual earnings growth, and CPI inflation, is the greatest. This is 2.6% (average earnings growth) from April 6th 2019.
This increases by the CPI inflation rate of 2.4% from April 6th. However, there is a cap on how much you can earn from the additional state pension. This goes to £176.41 from £172.28 for the 2019-2020 tax year.
Finance is a complicated area with a huge number of things you need to be aware of. As a result you may want to get help from the financial advisors Middlesbrough clients can count on. We offer help with numerous aspects of finance including pensions. Reach out to Robert Carlton for expert services and additional information.