Pensioners are set to receive a bigger than expected payment boost.
Pensioners are currently on course for a 4.8% boost to their State Pension in 2026 (Image: Getty)
Older state pensioners across the UK are set to receive a £439 annual boost from the Department for Work and Pensions (DWP) in 2026 thanks to the triple lock.
State Pension rates are increased by the government at the start of every new tax year in April and the amount it goes up is determined by one of three factors – known as the ‘triple lock’. These are the consumer price index (CPI) measure of inflation (measured for September in the previous year), average wage growth between May and July of the previous year, or 2.5%. Whichever is the highest out of these three will determine how much the State Pension is increased in the new tax year.
Pensioners are currently on course for a 4.8% boost to their State Pension in 2026 under the triple lock guarantee, with the rates expected to rise in line with average wage growth – as this is the highest figure out of the three factors.
This would mean older state pensioners receiving the full basic State Pension would see their rates rise to £184.90 per week in 2026 – up from the currently full weekly amount of £176.45.
Over a full year this would amount to a total of £9,614.80 in pension payments, giving pensioners on the full rate an extra £439.40 annually.
Meanwhile, pensioners on the full new State Pension are expected to see rates rise from the current £230.25 per week to £241.30 in 2026. This would give pensioners on the full rate a total of £12,547.60 in pension payments per year, which amounts to an extra £574.60 annually.
The boost to both the basic and new State Pension is on course to be higher than previously thought after a key figure used in the triple lock calculation was revised upwards.
Office for National Statistics (ONS) data released on October 14 showed an upwards revision to total wage growth including bonuses for the quarter to July, up to 4.8%, from 4.7% in a previous estimate.
Meanwhile, ONS figures showed that CPI inflation for September was 3.8%, remaining at the same level as both July and August.
As total wage growth, including bonuses, for the quarter to July was 4.8%, it makes this the highest of the three figures and the one that is expected to be used for April’s State Pension increase.
But the increase could mean that more pensioners will soon start paying tax on their State Pension as the rates may take them over the personal allowance threshold.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, said: “For pensioners, the latest inflation data suggests another inflation-beating boost to the annual state pension payment is coming their way next April.”
She added: “The personal allowance has remained at £12,570 since the 2020-21 tax year, so unless the Chancellor revises this in the Budget, more retirees may find themselves paying a tax bill.
“Of course, some will already be paying tax on their retirement income, either because they deferred access to the state pension or because they also receive income from a private pension.”
