2023/24 State Pension changes

The State Pension is changing

You may have heard terms like ‘triple lock’ or ‘pension credit’ being used a lot on the news recently. That’s because the State Pension – a regular payment from the government that most people can claim in retirement – is being updated. These changes will affect how much people may receive from the scheme.

In this article, we’ll explain what the State Pension changes mean for you and how it may impact your retirement planning.

Why is the State Pension increasing?

The State Pension increases at the start of every tax year (on 6 April) based on several factors – what is known as the ‘triple lock’. The amount the State Pension increases is determined by what is highest out of the following 3 factors:

• The consumer price index (CPI) measure of inflation (measured for September the year before)
• Average earnings between May and July of the previous year
• 2.5%

How much is the State Pension increasing by this year?

From 6 April 2023, the State Pension will increase by 10.1%. This is the amount of inflation measured by CPI for September 2022.

How much State Pension will I receive?

This depends on whether you’re eligible for the new State Pension or the basic State Pension.

¹ If you reach state pension age (SPA) after 6/4/2010, but may be different if you reached SPA before this date.

How do the State Pension changes impact my retirement planning?

While you’ll receive an increase in your state pension, it’s still unlikely to be enough for you to retire comfortably on.

If you’ve worked for an employer or been self-employed, it’s likely that you’ve picked up additional workplace or personal pension pots along the way. If you’re able to, putting a bit more into these pensions can give your savings a boost (and you’ll earn tax relief from the government at the same time).