Older state pensioners could be paid up to £1,800 per month thanks to an extra pension payment that newer state pensioners are no longer able to claim.
Though the exact amount a state pensioner is paid by the DWP depends on your circumstances, including National Insurance contributions, a state pensioner who retired before 2016 could be paid as much as £1,800.23 each month thanks to qualifying for now-defunct Additional Pension (AP) payments on top of their basic rate state pension.
From April, the basic rate pension for older state pensioners who hit state pension age before April 2016 has been set at £184.90 per week. Although it's paid for each four-week period (meaning the date of payment moves each month), averaged out across a year, it means that an older state pensioner can get up to £801.23 each month if they have a maximum National Insurance record (usually earned through 35 years of work or childcare).
Those with incomplete records will see lower total take-home for their pension payments, depending on how far off the full record they are, which the DWP calculates on a case-by-case basis when you first hit state pension age.
But on top of this, older state pensioners - and only older state pensioners - may also have AP schemes still paying out extra incremental payments from the DWP.
Older state pensioners can continue to get access to Additional Pension (AP) schemes, such as SERPS, and Second State Pension, which could mean that their total state pension payments would be higher than the base amounts mentioned here. Though the schemes are now no longer open to join, those who were enrolled in existing AP schemes through their employer before retirement are still being paid AP amounts each week on top of their basic pension payments.
For the new tax year, the DWP has set the maximum payment rate for AP payments at £230.54 per week. Averaged out across a year, it makes £999 per month.
This is then paid in addition to the basic rate, for a maximum possible total of £1,800.23 per month for an older state pensioner.
Though most will not maximise both payments, the downside of this for those that do is that it comes with tax implications.
This amount would put an older state pensioner well above the tax-free Personal Allowance threshold, and the state pension is taxable right now.
Chancellor Rachel Reeves has announced that in future, state pensioners who exceed the £12,570 Personal Tax Allowance will not owe tax on their state pension, as long as they have no other income.
Details of exactly how this will work are yet to be revealed, but HM Treasury has confirmed that Additional State Pension schemes for older state pensioners will not be exempted from tax. It means that older state pensioners will still see their entire state pension pot liable for tax, as it is now, even after the new exemption begins.
