Older state pensioners given £439.40 extra cash from Monday, April 6 | Personal Finance | Finance

Older state pensioners are being handed a financial boost from Monday, April 6 worth up to £439.40 extra per year, the DWP has confirmed. The state pension is guaranteed to increase every year based on one of three metrics – inflation, wage growth or a flat 2.5%, and this is enshrined in law for both the new post-2016 state pension and the older, basic state pension.

And it has been confirmed that the triple lock is set to produce a £439.40 annual increase for older state pensioners from April 6. That’s because the key average earnings figure has been confirmed at 4.8%, which is higher than inflation and, of course, higher than the 2.5% minimum floor for increases.

Older state pensioners, who hit state pension age before 2016, will get the 4.8% boost to their basic state pension, but the basic pension is set at a lower weekly amount than the full state pension, so the end result is a lower total increase, at £439.40 instead of £574.60 – both of these figures, of course, assume a full National Insurance record.

Those with incomplete records will see lower total take-home for their pension payments, depending on how far off the full record they are, which the DWP calculates on a case-by-case basis when you first hit state pension age.

Older state pensioners will see their payments increase from £176.45 per week £184.90, while new state pensioners will see theirs rise from the current £230.25 to £241.30 per week.

Crucially, both of these will still be below the £12,570 Personal Allowance threshold for income tax.

There is also another DWP rule which will allow older state pensioners to boost their weekly payments, depending on their income and savings.

Pension Credit is a benefit which older state pensioners (and new state pensioners) can use to boost their income. For example, an older state pensioner who only qualifies for the basic state pension will get £184.90 per week. But Pension Credit tops up this amount up to £238 per week, which is only a few pounds less than the new state pension anyway (£241.30). However, your other income, such as work earnings, property income, savings interest or a private pension, is counted first, and you won’t be able to get the full amount if you have exceeded income limits.

Older state pensioners can also get access to Additional Pension (AP) schemes, such as SERPS, and Second State Pension, which means that their total state pension payments could be higher than the base amounts mentioned here. Though the schemes are now defunct, those who were eligible for AP through their employer are still being paid the amounts each week on top of their basic pension payments.

The Chancellor has also announced that in future, state pensioners who exceed the £12,570 Personal Tax Allowance will not owe tax on their state pension, as long as they have no other income. Details of exactly how this will work are yet to be revealed, although Additional State Pension schemes for older state pensioners will not be exempted from tax.