Stoke-on-Trent independent financial adviser, Becky Hammonds of Willow Financial Solutions, looks at what the new tax year holds for pensioners.
The new tax year is underway and heralds some good news for pensioners.
In November, the Treasury confirmed the state pension would increase in line with September’s CPI inflation rate of 10.1%. The full new state pension will rise to £203.85 a week or £10,600.20 over the year from 6 April.
Based on the increase, anyone who reached state pension age before April 2016 will get about £156 a week or £8,100 for the year – although of course, this depends on how much state pension you receive.
Meanwhile, pension credit will rise by 10.1% from April, meaning claimants will get £201.04 up from £182.60 – a £18.44 difference. Couples will get £306.85 a week rather than £278.70.
The reintroduction of the triple lock to the 2023/24 State Pension increase gives a big boost to pensioners – lifting the new pension to above £10,000 for the first time.
The triple lock increases the State Pension each year either by inflation, earnings or 2.5 per cent, whichever is higher.
It was introduced in 2010, to reduce pensioner poverty and help retired people close the gap with those in work.
However, the Chancellor suspended the earnings element of the triple lock last year, because it would otherwise give pensioners an increase of more than eight percent from April, as wages bounced back after the pandemic. This meant that average earnings were not included in the calculation for pensions this financial year, with the inflation rate picked instead.
But, the Government confirmed in 2022 that it would reintroduce the triple lock in April 2023 until at least 2024.
It is estimated that more than 12 million people who claim state pension will benefit.
For pensions and investment advice contact Becky Hammonds on 07969 269677 or email becky@willowfs.co.uk
