The state pension is set to rise by 4.7% from April 2026, benefiting around 13 million pensioners across the UK. The increase follows official wage growth data from the Office for National Statistics showing earnings rose at this rate in the three months to July.
The rise is determined by the triple lock policy, which guarantees annual increases based on whichever is highest: inflation, average earnings growth, or 2.5%. With September inflation expected to reach 4% according to Bank of England forecasts, the wage growth figure represents the largest of the three measures.
Pension payment increases
The new state pension, for those who retired after April 2016, will reach £241.05 weekly or £12,534.60 annually. This represents an increase of £561.60 per year for recipients.
Those on the old state pension system, who retired before April 2016, will see their weekly payments rise to £184.75 or £9,607 annually. This older system will see an annual increase of £431.60.
Tax implications emerge
Manchester Evening News reports the state pension is now approaching the personal tax allowance threshold of £12,570. This means pensioners could find themselves liable for income tax by April 2027 if current trends continue.
Three-quarters of pensioners already pay income tax, with frozen tax thresholds dragging more people into the tax net. The rising cost of the triple lock guarantee is expected to be three times higher by the end of the decade than originally anticipated when the policy was introduced.
Government discretion remains
Despite the triple lock commitment, the Government retains ultimate control over pension increases and could choose not to implement the full rise. However, such a decision would represent a significant departure from established policy.
The new payment rates will begin in April 2026, providing the largest cash increase many pensioners have seen in recent years.
Sources used: "Sky News", "BBC", "Manchester Evening News", "The Standard"
Note: This article has been edited with the help of Artificial Intelligence.
