The Department for Work and Pensions (DWP) has outlined the increases to the State Pension for the financial year 2025-2026.
According to statistics, there are currently 12.9 million people receiving a State Pension, with 4.1 million on the New State Pension introduced in 2016 and the remaining 8.8 million on older types. The State Pension is annually uprated under the triple lock guarantee by whichever is highest of the previous September’s inflation, May-July earnings growth or a default minimum of 2.5 per cent.
Pay growth was the dominant measure when the decision was made ahead of the October Budget. The State Pension no longer qualifies for the annual Winter Fuel Payment of £200 to £300, which has brought many people’s retirement finances into sharper focus.
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A petition signed by nearly 15,000 people is calling for the State Pension to be available from the age of 60 and increased to £549 a week based on 48 hours at the National Living Wage, a significant increase on current levels.
These are all the new State Pension payment rates coming in from April 2025. The new financial year begins on April 6, with benefit and pension uprating taking effect from the start of the next working week on Monday, April 7. The State Pension is usually paid every four weeks so you’ll need a full four weeks starting on or after April 7 to see the increase reflected in what you receive.
This means the first people to get the higher amount will be those paid on Monday, May 5, reports Birmingham Live. These are all the new amounts:.
New State Pension
The State Pension payment rates for 2025/2026 have been announced. The New State Pension, paid to those reaching State Pension age (currently 66) after April 6, 2016, will see the maximum weekly rate increase from £221.20 to £230.25.
This equates to a new monthly amount of £921 and an annual sum of £11,973 based on 52 weeks.
Basic State Pension: Category A and B
Basic State Pensions fall into categories A and B. Category A pensions are based on qualifying National Insurance contributions, while Category B pensions are for spouses and civil partners of deceased recipients who aren’t entitled to a Category A pension.
The new maximum weekly rate for these categories will rise from £169.50 to £176.45, with a monthly amount of £705.80 and an annual total of £9,175.40.
Basic State Pension: Category BL
The Basic State Pension Category BL is for those without basic pension entitlement but can claim using their spouse or civil partner’s National Insurance contributions. It consists of up to 60 per cent of the spouse’s basic pension.
The new maximum weekly amount will be £105.70, up from £101.55, with a monthly sum of £422.80 and an annual total of £5,496.40.
Basic State Pension: Category C or D
Finally, the Basic State Pension Categories C and D cover widows of people who reached pension age before July 5, 1948, and those aged 80 and over respectively.
The new maximum weekly amount for these categories will also increase from £101.55 to £105.70, with a monthly amount of £422.80. The new annual amount based on a 52-week year is set at £5,496.40.
Additional elements
Maximum additional pension (own plus inherited)
Weekly amount: increasing from £218.39 to £222.10
Increase of Long-term incapacity for age
Higher weekly rate: increasing from £28.40 to £28.90
Lower weekly rate: increasing from £14.20 to £14.45
Invalidity Allowance (Transitional) for State Pension
Higher weekly rate: increasing from £28.40 to £28.90
Middle weekly rate: increasing from £18.20 to £18.50
Lower weekly rate: increasing from £9.10 to £9.25
These amounts fall short of the Pension and Lifetime Savings Association (PLSA)’s recommendation, which suggests that a single person needs at least £14,400 a year for a minimum standard of living. This would cover a week-long UK holiday and spending £200 a month on food shopping but wouldn’t suffice to run a car.
Notably, it’s £2,897 more than what one would receive from the maximum New State Pension. For a moderate lifestyle in retirement, one would require £31,300, which includes the costs of a car and a two-week holiday in the Mediterranean.
A comfortable life would necessitate £43,100 a year. However, analysts warn that many individuals are “woefully unprepared” for retirement, with “insufficient savings and growing financial pressures” likely to lead to the stark realisation that they are not in a financially secure position when it’s too late.
Financial experts have revealed a shocking 21 per cent of UK adults have no pension savings whatsoever. The situation is even more concerning for those approaching retirement, with 17 per cent of over-55s – an age group that should be entering retirement with financial security – yet to save a single pound.
Even among those who have managed to save, many are not meeting the necessary amount for even the most basic standard of living in retirement. Experts suggest these PLSA figures highlight the growing disparity between what people need and what they can expect to receive.