The Department for Work and Pensions (DWP) has said the ‘National Insurance Fund’ has “enough money to self-finance for at least the next five years” amid growing concerns over how the State Pension will be paid for if National Insurance is scrapped in favour of a single tax system. Pensions Minister Paul Maynard MP also said the Treasury has the ability to “top up the National Fund from the Consolidated Fund when needed”.

Earlier this week, Conservative MP Damien Moore asked DWP about the “potential implications” of the State Pension uprating of 8.5 per cent next month on the “sustainability of pension funding”.

In a written response on March 19, the DWP Minister, said: “The New State Pension was introduced in April 2016 with the aim of providing a clearer, sustainable foundation for State Pensions for decades to come.”

He continued: “Each year, the Government Actuary’s Department publishes a report showing the impact of uprating decisions on the National insurance Fund. The most recent report in January this year took into account the 8.5 per cent increase in the Basic and New State Pensions which will come into force from 8 April.

“The assessment was that the Fund would have enough money to self-finance for at least the next five years. HM Treasury has the ability to top up the National Fund from the Consolidated Fund when needed, even if receipts do not match expenditure. The report said that a Treasury Grant would not be needed in the next five years.”

Some 12.7 million older people are currently in receipt of the New or Basic State Pension, including more than one million living in Scotland.

The uprating next month means someone on the full New State Pension will see payments go up from £203.85 per week to £221.20 and as payments are typically made every four weeks, this amounts to £884.80 each pay period.

Over the 2024/25 financial year, this is an increase of £902, taking the annual income from State Pension alone from £10,600 to £11,502.

Someone on the full rate of the Basic State Pension will see payments go up from £156.20 per week to £169.50 – this amounts to £678 each pay period. During the 2024/25 financial year, this is an increase of £692, taking the annual income from £8,122 to £8,814.

Below are the new payment rates, which come into effect on April 8, however, it’s important to be aware that even though weekly rates will rise on that date, most pensioners will not see the full amount reflected in their payments until four weeks after the increase date as the State Pension is paid in arrears.

New State Pension payment rates 2024/25

These payments will rise by 8.5%:

• Full payment rate: £221.20 (from £203.85)
• Every four-week pay period: £884.80 (from £815.40)

Basic State Pension payment rates 2024/25

These payments will rise by 8.5%:

• Category A or B Basic State Pension (full rate): £169.50 (from £156.20)
• Every four-week pay period: £678.00 (from £624.80)
• Category B (lower) Basic State Pension – spouse or civil partner’s insurance: £101.55 (from £93.60)
• Category C or D – non-contributory: £101.55 (from £93.60)

Additional pension payments

Increments to the following will rise by 6.7%:

• Maximum additional pension (own plus inherited): £218.39 (from £204.68)

Increments to the following will rise by 6.7%

• Basic pension
• Additional pension
• Graduated Retirement Benefit (GRB)
• Inheritable lump sum

Addition at age 80: £0.25 (no change)

Increase of Long-term incapacity for age

• Higher rate: £28.40 (from £26.60)
• Lower rate: £14.20 (from £13.30)

Invalidity Allowance (Transitional) for State Pension recipients

• Higher rate: £28.40 (from £26.60)
• Middle rate: £18.20 (from £17.10)
• Lower rate: £9.10 (from £8.55)

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