DWP update on £958 state pension payments

3 hours ago 4

Payments are timetabled to increase 4.1 percent from April

A proposal has been put forward to change state pension payment amounts(Image: Getty)

The Department for Work and Pensions (DWP) has issued a response to a query about changing the state pension payment schedule. Liberal Democrat MP Rachel Gilmour brought up in Parliament the idea of switching from four-weekly instalments to monthly payouts.

Currently, the full basic state pension is £169.50 per week, totalling £678 every four weeks, while the new full state pension is £221.20 weekly, or £884.80 per payment period. Monthly payments would see the full basic state pension averaging £734.50, with the new amount around £958.50.

Labour pensions minister Emma Reynolds addressed the monthly payment proposal, stating: "State pension payments are usually paid four weekly in arrears." She continued: "People have the option to be paid weekly or in some circumstances bi-weekly. There are no plans to introduce alternative payment arrangements."

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State pension amounts are set for a 4.1 percent hike in April due to the triple lock policy, raising the full new state pension to £230.25 a week and the full basic state pension to £176.45 a week. The Labour party has committed to keeping the triple lock on state pensions for this parliamentary term, ensuring increases will match the highest of 2.5 percent, inflation, or average earnings growth.

However, due to the spiralling cost of state pensions, many experts predict that the Government will soon have to alter the way pension increases are calculated. Steven Cameron, pensions director at Aegon, put forward the idea of basing the increase on the average for inflation or earnings across three years, rather than just over the past year.

State pensioners enjoyed a hefty 10.1 percent increase in their payments in April 2023 due to high inflation, followed by an 8.5 percent bump the next year pegged to earnings. Mr Cameron said: "If you averaged it out more, it would become more predictable and it might be more fair across generations."