Basic state pension increased 15% ??

DWP letters are not expected for another 10 days, but I have had my new 2023/24 coding from HMRC.  The basic pension amount deducted from personal allowance was in previous years accurate to a few pennies.  This time my basic pension amount has increased by almost exactly 15%  not 10%.  Intriguing, but why?  My wife's BSP has also increased by exactly 15%.  We are in our mid seventies.  Our BSP's have a small old SERPS additional element, just £8-10 per week.  I await the breakdown statement in DWP's letter with interest.

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  • edited 6 March at 2:33PM
    moleratmolerat Forumite
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    edited 6 March at 2:33PM
    Your tax code is normally based on 1 x old and 51 x new pension weeks, how does that look.
  • Dazed_and_C0nfusedDazed_and_C0nfused Forumite
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    Sounds very odd.  Is it definitely the State Pension tax code deduction on its own that's increased by 15%?

  • GoldenyearsGoldenyears Forumite
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    Sounds very odd.  Is it definitely the State Pension tax code deduction on its own that's increased by 15%?

    It is itemised in the coding notice as "Less State Pension".  In previous years it has always been very close to 52x new weekly amount.  The difference was just pennies, certainly not 1 x old plus 51 x new.
  • edited 6 March at 3:23PM
    moleratmolerat Forumite
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    edited 6 March at 3:23PM
    Sounds very odd.  Is it definitely the State Pension tax code deduction on its own that's increased by 15%?

    It is itemised in the coding notice as "Less State Pension".  In previous years it has always been very close to 52x new weekly amount.  The difference was just pennies, certainly not 1 x old plus 51 x new.
    There are often 2 different figures, one in your expected income which is usually 52 x new and one for calculating your code which generally uses 1 x old and 51 x new.  With this year's large increase there is going to be a greater disparity between the 2.  I have just done a comparison using the lower from last year and the higher from this and it only comes out at not much over 10%, very strange.

  • GangaGanga Forumite
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    My state pension will increase by just over 11% ,good news as i was expecting 10% also its not just the main element of the pension that increases its also grad contributions etc.
    ITS NOT EASY TO GET EVERYTHING WRONG ,I HAVE TO WORK HARD TO DO IT!
  • edited 6 March at 9:36PM
    GoldenyearsGoldenyears Forumite
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    edited 6 March at 9:36PM
    I am now wondering if it's some element of my Civil Service pension increase added to BSP which is causing the excess.  It's normally very small but then  I've never had a CPI increase more than 5% before.  I will find out in a few days.
  • edited 7 March at 10:27AM
    SilvertabbySilvertabby Forumite
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    edited 7 March at 10:27AM
    I am now wondering if it's some element of my Civil Service pension increase added to BSP which is causing the excess.  It's normally very small but then  I've never had a CPI increase more than 5% before.  I will find out in a few days.
    Indeed.  This is going to generate a lot of head scratching and questions on these boards come April/May...

    In the case of those with contracted out service between 1978 and 1997, and who reached SPA before April 2016, cost of living increases are applied thus:

    Pension (in your case Civil Service)  is the sum of 3 parts.

    Pre 1988 GMP = nil increase paid by CS
    Post 1988 GMP = 3% (cap) paid by CS
    Excess = 10.1% (2023 CPI) paid by CS

    The full pre 1988 increase plus the remaining 7.1% from the post 1988 GMP is then paid with your State pension.

    As you say, when inflation is low, the difference is negligible.  But this year, with a CPI increase of 10.1%, it will stick out like a sore thumb.

    Then we come to the GMP increases for post April 2016 SPA, which is a whole new ball game.....
  • xylophonexylophone Forumite
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    See 
    https://forums.moneysavingexpert.com/discussion/comment/61084659/#Comment_61084659

    You will note that the poster (who has pre and post 88 GMP) is querying his increase for the year 2013/4.

    Let's suppose that inflation in Sept 2012 had been 10.1%.

    Then his pre 97 ASP increases to £108.91.

    His COD will be £60.65 (pre 88 GMP never changes) + £39.31 ( because post 88 GMP increased by 3% by his occupational scheme).

    Deduct £99.96 from £108.91.

    His ASP for 13/14 becomes £9.15.

    Just to illustrate the difference high inflation makes.

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