Older people in the UK will be among those to benefit from a boost to their bank accounts next month. As of Monday, April 10, state pension payments made by the Department for Work and Pensions (DWP) will see a 10.1% increase as benefits are raised in line with the September inflation figure.
The rise in payments is aimed at helping to mitigate the rising cost of living - as prices for everyday items such as food and fuel sky-rocket. It was a move announced by Chancellor Jeremy Hunt in his November budget and will cost the exchequer £11billion when combined with other benefit increases taking place at the same time.
The new state pension rate will increase from £185.15 a week to £203.85. This is for those who reached state pension age on or after April 6, 2016. For the old state pension, also called the basic state pension, the basic rate will rise from £141.85 to £156.18. Chronicle Live reports that people who are entitled to the old state pension may also be eligible for additional state pension payments, however, these are dependent on your earnings.
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The DWP is also reminding people that the state pension is not paid automatically and instead it must be claimed. Pensioners will be sent a letter with instructions on how to claim around two months before reaching state pension age, which is currently 66 for both men and women.
If you do not claim your state pension, or if you do not want to claim it, then it is possible to defer it. If this is the case, you do not need to do anything as your pension will automatically be deferred until you claim it. Deferring your state pension could increase the payments you get once you do decide to claim it. Any extra payments you get from deferring could be taxed.
In addition to state pension, DWP's Pension Credit exists to support retirees on a low income. From April, the rates will rise as follows:
For those who are single, your income will be topped up to £201.04 instead of the current rate of £182.60
For couples, it'll be topped up to £306.85 as compared with the current rate of £278.70
If your income is lower than this, you should be eligible for the benefit.
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