The state pension is scheduled to increase by over £574 per year starting in April following the recent inflation data release. This rise is governed by the triple lock rule, which adjusts the state pension every April based on the highest of earnings growth from May to July, September inflation rate, or a fixed 2.5%.
Initial reports indicated wage growth for May to July at 4.7%, but the Office for National Statistics (ONS) revised this figure upward to 4.8% in a recent update. Current inflation stands at 3.8%, as per the latest September figures, suggesting that wage growth will likely dictate the state pension increase under the triple lock mechanism.
Experts at Hargreaves Lansdown project that the full new state pension will climb from £230.25 weekly to £241.30 weekly in April 2026, equating to a yearly boost from £12,547.60 to £13,122.20.
Nonetheless, this increase places the state pension just below the personal allowance threshold of £12,570, which could result in many individuals paying income tax on their state pension when it rises again in the 2027/28 tax year. The old basic state pension is anticipated to rise from £176.45 weekly to £184.90 weekly (£9,615 annually).
These figures represent the maximum state pension amounts attainable, with actual payments possibly lower based on an individual’s National Insurance history. Eligibility for the new state pension applies to men born on or after April 6, 1951, or women born on or after April 6, 1953, requiring most individuals to have 35 qualifying years on their National Insurance record to receive the full amount.
For those eligible for the older basic state pension, such as men born before April 6, 1951, or women born before April 6, 1953, the number of qualifying years for the full amount varies based on birthdate and gender. The state pension age is currently 66 for both men and women, with planned increases to 67 between 2026 and 2028, followed by a further rise to 68 in the mid-2040s.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, cautioned that the projected increases are subject to confirmation in the upcoming Budget announcement and highlighted ongoing considerations regarding the state pension age review. The government faces challenges in balancing state pension costs with the growing population of pensioners, potentially leading to further state pension age adjustments and debates on the sustainability of the triple lock system in the long term.