The Department for Work and Pensions (DWP) is set to introduce major changes to the State Pension system starting April 2025. This includes a 4.1% increase in both the new State Pension and basic State Pension. These updates will affect pensioners receiving Serps, inherited pensions, and deferred pensions, providing them with higher payments to keep up with the rising cost of living.
From April 7, 2025, those eligible for the new State Pension will receive £230.25 per week, which is a rise from £221.20. This increase will add £470 per year, bringing the total annual pension to £11,970.
Let’s dive into the key changes and what they mean for you.
Who Qualifies for the New State Pension?
The new State Pension is available for:
- Men born on or after 6 April 1951
- Women born on or after 6 April 1953
To qualify for the full new State Pension, you need to have 35 years of National Insurance contributions. However, if you have gaps in your National Insurance record, you can make voluntary contributions to increase your pension amount.
If you have 10 qualifying years, you will still receive some State Pension, but it will be lower than the full amount.
Basic State Pension Increase
For those who reached pension age before April 2016, the basic State Pension will rise from £169.50 to £176.45 per week. This is also a 4.1% increase.
Some people receiving the basic State Pension may also be entitled to additional top-ups, including:
- Additional State Pension
- State Second Pension (S2P)
- Serps (State Earnings-Related Pension Scheme)
How the Triple Lock System Affects Pensions
The triple lock system ensures that the State Pension increases annually based on the highest of these three factors:
- Inflation (Consumer Prices Index – CPI)
- Average earnings growth
- A 2.5% minimum increase
For 2025, the State Pension will increase by 4.1%, based on wage growth figures. The Labour government has confirmed that the triple lock will remain in place at least until the end of the current Parliament.
In addition, Serps, State Second Pension (S2P), and other additional pensions will increase by 1.7% in April 2025.
Pension Age Set to Rise Further
Currently, the State Pension age is 66 for people born between 6 October 1954 and 5 April 1960. However, for younger generations, the pension age is expected to rise. According to experts, the State Pension age could rise to 71 by 2050 to ensure the system remains financially sustainable.
Higher Payments for Those Deferring Their Pension
Some pensioners choose to defer their pension to receive higher payments later. If you defer, your pension increases by 1% for every nine weeks you delay claiming it, which adds up to about 5.8% extra per year.
In April 2025, the extra amount received for deferring will also rise by 1.7%.
Inherited State Pension Increases
If you have inherited part of your spouse or civil partner’s State Pension, you will see the following increases:
- For basic State Pension (pre-2016): 4.1% increase
- For new State Pension (post-2016): 1.7% increase
Increase in the Married Women’s State Pension
Spouses (often women) who retired with a small pension before April 2016 may receive 60% of their partner’s basic State Pension. The ‘Category B’ State Pension will rise by 4.1% to £105.70 per week.
Additionally, those aged 80 or older who receive a ‘Category D’ State Pension will also see a 4.1% increase, though the extra 25p per week for those over 80 will remain unchanged.
Graduated Retirement Benefit (GRB) Increase
If your State Pension includes any Graduated Retirement Benefit (GRB) payments (from the period between 1961 and 1975), these payments will increase by 1.7% in April 2025.
The April 2025 pension updates will provide higher payments for millions of retirees, helping them keep up with the rising cost of living. With the triple lock system, pensioners can expect annual increases, which provide a safety net during retirement.
To maximize your pension, check your National Insurance record to ensure you have enough qualifying years, make voluntary contributions if necessary, and consider the benefits of deferring your pension for higher future payments. If you are entitled to Serps, inherited pensions, or other benefits, be sure to check how the new rates apply to your payments.
FAQ’s
How much will the State Pension increase to in April 2025?
The new State Pension will increase to **£230.25 per week** in **April 2025**, a rise from **£221.20**. This marks a **4.1% increase**, adding £470 per year.
Who qualifies for the new State Pension?
Men born on or after **6 April 1951**, and women born on or after **6 April 1953**, who have 35 years of National Insurance contributions, qualify for the **full new State Pension**.
What is the triple lock system for pensions?
The **triple lock system** ensures that the State Pension increases annually based on the highest of inflation (CPI), average earnings growth, or a **minimum 2.5% increase**. In **2025**, it will rise by **4.1%** based on wage growth.
What happens if I defer my pension?
If you **defer** your pension, your payments increase by **1% for every nine weeks** you delay claiming, which adds up to around **5.8% extra per year**. In April 2025, this increase will rise by **1.7%**.
How can I maximize my State Pension?
To maximize your **State Pension**, check your **National Insurance record**, make **voluntary contributions**, and consider **deferring** your pension for higher future payments.
