The increase was confirmed in the autumn, when Chancellor Rachel Reeves announced the Government would be maintaining the commitment to the pension triple lock.
The triple lock guarantees an increase in pensions in line with average earnings, inflation or 2.5%, whichever is highest.
Making the announcement the Chancellor said: “This commitment means that while working-age benefits will be uprated in line with CPI at 1.7%, the basic and new state pension will be uprated by 4.1% in 2025-26.
“This means that over 12 million pensioners will gain up to £470 next year.”
Pension Credit is also increasing from April, with the Chancellor saying: “The pension credit standard minimum guarantee will also rise by 4.1% from around £11,400 per year to around £11,850 for a single pensioner.”
DWP letter to every pensioner offering £4,000 boost
The DWP is writing a letter to every pensioner this year – and reading carefully could mean they get up to £4,000 more help.
The Department for Work and Pensions will write to the 12.9 million people currently claiming the State Pension before the payments increase on April 7.
Of these, 4.1 million receive the New State Pension (post-April 2016), and 8.8 million receive the Basic (or Old) State Pension (pre-April 2016).
Both the New and Basic State Pensions will rise by 4.1% in April under the earnings growth measure of the Triple Lock, as announced in the autumn budget.
Some of the other DWP benefits available to pensioners will increase by 1.7%, in the same way as working age and disability benefits.
Pensioners should check the amount they will receive, and be sure to read the leaflet included with the letter, which – if eligible – could increase their annual income by an average of £4,200.
It’s a prompt to claim Pension Credit, which is now more vital than ever, as it is the gateway to means tested payments, such as the annual Winter Fuel Payment and free TV licenses.
Who is eligible for pension credit?
Pension Credit is the most under-claimed benefit, aimed at providing extra financial support for older people on low incomes – both singles and couples.
You must live in England, Scotland or Wales and have reached State Pension age to qualify for Pension Credit. To qualify, you’ll need to have a weekly income of less than £218.15 if you’re single or £332.95 if you have a partner.
If your income is higher, you may still be eligible for Pension Credit if you have a disability, you care for someone, you have savings or you have to pay certain housing costs, such as mortgage interest payments.
It used to be the case that couples, where one person was over state pension age, could claim, but new rules now mean that both people in a couple must be over state pension age to apply. So, if you’re single and move in with a partner who is younger than the threshold, you will stop being eligible.
But if you’re already receiving pension credit under the old system it won’t stop unless your circumstances change.