State pension set to increase by £700 next year

The full new state pension is set to rise to more than £11,000 when the next increase is applied next April.

The state pension increases each year in line with the triple lock policy. This guarantees it goes up each year, in line with the highest of 2.5 percent, inflation or the rise in average earnings.

If the inflation figure is applied, the measure that is used is the consumer price index (CPI) rate for September.

High levels of inflation last year meant state pensioners received a record 10.1 percent boost this April, and forecasts suggest payments could get a sizeable increase next year as well.

Bank of England forecasts suggest inflation will stay high and average seven percent in the third quarter of 2023.

The current full basic state pension is £156.20 a week, or £8,122.40 a year, while the full new state pension is £203.85 a week, or £10,600.20 a year.

If there was a seven percent increase, the full basic state pension would go up to £167.13 a week, or £8,690.76 a year.

The full new state pension would go up to £218.12 a week, or £11,342.24 a year, providing an annual increase of more than £700 a year.

A person can check how much state pension they are on track to receive using the state pension forecast tool on the Government website.

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An individual typically needs 30 years of National Insurance contributions to get the full basic state pension and 35 years of contributions to get the full new state pension.

Those who have gaps in their National Insurance record can voluntarily pay contributions towards their state pension.

A person can usually pay up to six years ago but at the moment, Britons can pay contributions up to another 10 years ago, as far back as 2006.

This opportunity will only last for another two months as the deadline to pay contributions as far back as April 2006 ends on July 31.

The state pension forecast tool is also useful as it will show a person if they can claim Pension Credit and how much they would get.

This benefit tops up the income of people of state pension age on low incomes, and a person does not have to be claiming their state pension to get the support.

Single claimants get their income topped up to £201.05 a week while couples get a top up to £306.85 a week.

Claimants can get extra payments depending on their situation, such as if they have savings towards their retirement or if they care for another adult.

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