The state pension is poised to increase by over £574 annually starting next April following the release of the latest inflation data today.
As per the triple lock guarantee, the state pension sees an annual rise in April based on the highest of earnings growth between May to July, September’s inflation rate, or a minimum of 2.5%.
Initial estimates pegged wage growth for May to July at 4.7%, but a recent update from the Office for National Statistics (ONS) revised this figure upwards to 4.8%.
With inflation currently standing at 3.8% following the September announcement, it is likely that wage growth will dictate the triple lock increase.
Hargreaves Lansdown analysts suggest that the full new state pension could climb from £230.25 per week to £241.30 per week come April 2026, amounting to a yearly increment from £12,547.60 to £13,122.20.
Nonetheless, this rise falls slightly short of the personal allowance threshold, set at £12,570, potentially resulting in millions facing income tax on their state pension in the 2027/28 tax year.
The old basic state pension is expected to rise from £176.45 per week to £184.90 per week (£9,615 annually).
These figures represent the maximum state pension amounts, subject to variations based on an individual’s National Insurance contributions.
The new state pension is applicable to men born on or after April 6, 1951, and women born on or after April 6, 1953, requiring most individuals to have 35 qualifying years on their National Insurance record for the full entitlement.
For those eligible, the older basic state pension applies to men born before April 6, 1951, or women born before April 6, 1953, with the number of qualifying years varying based on birth date and gender.
Currently set at 66 for both genders, the state pension age will incrementally increase 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, emphasized that while these increases are pending confirmation at the Budget, ongoing reviews into the state pension age will consider factors such as increasing longevity and the sustainability of the triple lock mechanism.
