The state pension is expected to increase by over £574 per year starting in April next year following the recent inflation data announcement. This rise is in line with the triple lock guarantee, which ensures that the state pension rises each April based on the highest of earnings growth between May and July, inflation in September, or a minimum of 2.5%.
Initially projected at 4.7%, the wage growth for May to July was revised by the Office for National Statistics (ONS) to 4.8%, indicating that this figure is likely to be used for the triple lock calculation. Inflation currently stands at 3.8%, based on the latest September figures.
Analysts at Hargreaves Lansdown have estimated that the full new state pension will increase from £230.25 per week to £241.30 per week in April 2026, amounting to a yearly rise of £574.60 to £12,547.60.
However, this increase brings the state pension close to the personal allowance threshold of £12,570, potentially resulting in many individuals being subject to 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).
The eligibility criteria for the new state pension differ based on gender and birth date, with most individuals needing 35 qualifying years in their National Insurance record to receive the full amount. The state pension age is currently set at 66 and is scheduled to gradually 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 the confirmed increases are pending the Budget announcement and are part of an ongoing review of the state pension age. The government is considering the sustainability of the state pension system given the increasing number of individuals living into their nineties. Changes to the triple lock and potential adjustments to the state pension age may be on the horizon in the future.
