The Department for Work and Pensions (DWP) has confirmed a significant financial uplift for millions of older people across the United Kingdom. The Labour government has announced that both the basic and new State Pension will increase by 4.8% from April 2026, a rise aligned with earnings growth.
What the Pension Increase Means for You
This uprating means that over 12 million pensioners will gain up to £575 each in the 2026-27 financial year. The increase is a direct response to the rising cost of living and is designed to ensure the state pension maintains its purchasing power.
Alongside the core state pension, the government has also committed to increasing the Pension Credit Standard Minimum Guarantee by the same 4.8% rate from April 2026. This vital top-up benefit ensures a minimum weekly income for the poorest pensioners.
Pension Credit and Guarantee Credit Explained
For those who qualify, Pension Credit tops up weekly income to £227.10 for single people and £346.60 for couples. The upcoming 4.8% rise will push the maximum single weekly payment to approximately £238, which equates to an extra £572 over the course of a year.
This top-up, known as Guarantee Credit, can be supplemented further. For instance, an extra £46.40 per week is available for those who are eligible for Carer’s Allowance or Carer Support Payment, or who have claimed it but receive a higher benefit instead.
Some pensioners may also qualify for the Savings Credit element of Pension Credit if they reached State Pension age before 6 April 2016 and have some savings or a private pension. This can provide up to £17.30 a week for singles and £19.36 for couples.
Simplifying Tax for Pensioners
In a move to reduce bureaucracy, the government will ease the tax administrative burden for a specific group of pensioners. From 2027-28, those whose sole income is the basic or new State Pension, with no other increments, will not have to pay small amounts of tax via Simple Assessment if their pension exceeds the Personal Allowance.
The government is currently exploring the best method to implement this change and has promised to provide more detail next year. This measure aims to simplify the financial lives of pensioners who rely almost entirely on the state pension.
This combined package of a state pension increase, Pension Credit uplift, and tax simplification represents a substantial financial policy shift aimed at supporting older residents throughout the UK during a period of economic pressure.
