Exact amount YOUR state pension is set to go up by next year under triple lock – and why you may be taxed on it

THE exact amount your state pension is set to increase by has been revealed in a boost for retirees.

As part of the triple lock the state pension increases each year by September’s inflation figure, average earnings growth between May and July or 2.5% – whichever is highest.

Today’s figures from the Office for National Statistics (ONS) showed that total pay including bonuses for the three months to July was 3.9%.

Unless inflation rises sharply from its current rate of 2.9% it is likely that this figure will be used to calculate how much the state pension will increase from April.

But today’s figure is slightly below market expectations, while the last time total earnings growth was lower than 2.9% was from September to November 2020.

As a result, those who receive the full new state pension could see their payments increase from £241.30 a week to £250.70 – an increase of £9.40 a week.

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The increase will mean a retiree who receives the full new state pension will get £13,036 a year, which is above the £12,570 threshold at which you begin to pay income tax.

But in the Budget last year former chancellor Rachel Reeves confirmed that pensioners whose sole income is the state pension will not have to pay tax.

It is not yet clear how this could work.

How does the state pension work?

AT the moment the current state pension is paid to both men and women from age 66 – but it’s due to rise to 67 by 2028 and 68 by 2046.

The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.

But not everyone gets the same amount, and you are awarded depending on your National Insurance record.

For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.

The new state pension is based on people’s National Insurance records.

Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.

You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.

If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.

To get the old, full basic state pension, you will need 30 years of contributions or credits.

You will need at least 10 years on your NI record to get any state pension.

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Tuesday 15 September

Genoa