2023/24 State Pension changes – what it means for you
Learn more about the State Pension changes how they may impact your retirement planning.
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
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.
New State Pension
If you receive the new State Pension, the full amount you’ll receive for the 2023/24 tax year will be £203.85 a week (compared to £185.15 a week for the 2022/23 tax year).
You can claim the new State Pension if you’re:
- a man born on or after 6 April 1951
- a woman born on or after 6 April 1953
You’ll need 35 qualifying years of National Insurance contributions to get the full new State Pension.
Basic State Pension
If you receive the basic State Pension, the full amount you’ll receive for the 2023/24 tax year will be £156.20 a week (compared to £141.85 a week for the 2022/23 tax year).
You’ll get the basic State Pension if you’re:
- a man born before 6 April 1951
- a woman born before 6 April 1953
To claim the full amount, you usually need 30 years1 of National Insurance contributions.
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).
Find out how workplace pension contributions work and how to pay more in.
Are you on track to live the retirement you want? Find out by using our retirement planner in your account.