Six major pension changes coming in 2025 you need to know – including a pay rise
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MILLIONS of pensioners will get a pay rise in April next year thanks to boosts to the state pension and Pension Credit. Those are just two changes coming in next year that will impact people's retirement funds. Other key changes to be aware of include ongoing plans to change how pensions work for inheritance tax purposes and pension dashboards finally becoming a reality.
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Here’s everything that is currently planned for next year for pensions, and what it means for your wallet. The state pension will increase by 4.1% in April 2025, thanks to something known as the "triple lock" guarantee. The triple lock guarantees that the benefit will rise by the highest of inflation, average earnings growth and 2.5%.
This year, earnings growth was the biggest factor, and so the government has confirmed that the state pension will increase from £221.20 a week to £230.25. This amounts to around £470 extra a year for someone who gets the full amount. Meanwhile, the full, old basic state pension for people who retired before 2016 will increase to £176.45 per week.
Currently, it is worth £169.50 per week, or £8,814 per year. The additional state pension is an earnings-related entitlement consisting of the State Second Pension (S2P) or its predecessor, the State Earnings-Related Pension Scheme (SERPS). This is not triple-locked and so will rise in line with the Consumer Prices Index (CPI) inflation rate of 1.7%.
