For the 2020/2021 tax year, your pension will increase by up to 2.4%. This will be effective from 1 April 2020.

What is the increase based on?

Your pension is reviewed each year and increases according to orders published by the government.

So, for example, the increase for the 2020/21 tax year is based on the Retail Price Index (RPI) figure from September 2019 (2.4%).

Will everyone get the full 2.4% increase?

Only those who took their pension benefits – or became a preserved pensioner – on or before 1 April 2019 will get the full 2.4%.

If you took your benefits – or became a preserved pensioner – on or after 2 April 2019, you won’t get the full amount because you’ve been retired – or preserved – for less than a year. Spouses’ pensions increase in the same way.

If your pension includes Guaranteed Minimum Pension (GMP) a lower increase may apply to part of your pension. GMP would have been built up during any service between 1978 and 1997 and increases will apply at a lower rate to the GMP element of the pension after age 60 for women and after age 65 for men.

Details of your individual increase (which includes details of the amount of GMP included in your pension) will be sent to you in the post shortly before the April pension instalment is paid.

And how about the State Pension?

The State Pension is also due to rise in the new financial year. The increase occurs to keep up with the rise of the cost of living each year. Pensioners on the full Basic State Pension will receive an extra £5.04 per week, equating to a total of £134.24.

Those retirees who are entitled to the full new State Pension (not everyone is) can look forward to an extra £6.58 per week, rising from £168.60 per week to a new total of £175.18 from April 2020.

If you have any questions about your State Pension increase, you can contact DWP Pension Service claim line on 0800 731 7898 (textphone: 0800 731 7339). Phone lines are open Monday to Friday, 8am to 6pm (except public holidays).