State Pension Increase
Millions of retirees are set to receive a significant boost to their state pension payments, with an increase of up to £901 a year starting this month. Chancellor Jeremy Hunt announced a 8.5% rise in pensions, translating to a weekly increase from £203.85 to £221.20. However, experts caution that the increase may push some pensioners into the tax bracket for the first time.
Pension Credit Rise
Alongside the state pension increase, pension credit payments are also going up by 8.5% from April 8. This means single households will see their payments rise from £201.05 to £218.15. Pension credit is a tax-free benefit aimed at supporting individuals over the state pension age who are on a low income, yet many eligible pensioners are not claiming this extra financial assistance.
Lifetime Allowance Scrapped
April 6 marks the scrapping of the lifetime allowance (LTA) on pension savings, allowing individuals to save more into their pensions without facing tax charges. Approximately two million middle-class Brits will benefit from this change, which was first announced in March 2023. The move aims to provide relief to doctors and other professionals who risked being taxed on their savings.
Online State Pension Top-Up System Delayed
Despite expectations for a new online state pension top-up tool to be launched before April 6, it has been delayed. This tool is designed to simplify the process of checking state pension details and paying for missing National Insurance credits. The Government has extended the top-up deadline to April 2025 due to high demand, but the complexity of the system may require individuals to contact both HMRC and DWP for assistance.
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