A change to State Pension payments is set to be confirmed on Wednesday.
Rachel Reeves is due to confirm the new State Pension rates for 2026 in the Budget on Wednesday (Image: Getty)
Older state pensioners across the UK are set to get £9,614 annual payments from the Department for Work and Pensions (DWP) in an announcement expected this Wednesday.
Chancellor Rachel Reeves will deliver the autumn Budget on November 26, where she will outline tax, spending and borrowing plans for the year ahead, with the announcement to impact individuals across the country, as well as businesses and the UK economy as a whole. The Government increases State Pension rates every year, and the amount it goes up by is determined by whichever is the highest out 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%.
Pensioners are on course for a 4.8% rise in the State Pension from April 2026, in line with average wage growth, as this has been confirmed as the highest figure out of the triple lock factors, above inflation and the 2.5% minimum floor for increases. Unless a radical change to State Pension rules is announced at short notice, the State Pension is set to rise again in line with the triple lock guarantee, which means that 4.8% is expected to be the figure used to set the new rates.
Reeves is set to confirm this in the autumn Budget announcement this Wednesday, and with a 4.8% increase, older pensioners who get the basic State Pension are in line to get up to £9,614.80 in pension payments per year from April 2026, when the new rates take effect.
Currently, the full basic State Pension is worth £176.45 per week, but with an expected 4.8% increase from the start of the new tax year in April, this is on course to rise to £184.90 per week in 2026, giving pensioners a weekly payment increase of £8.45.
Over a full year, this would amount to a total of £9,614.80 in pension payments (up from £9.175.40), giving older pensioners on the full rate an extra £439.40 annually.
Men born before April 6, 1951, and women born before April 6, 1953, receive the basic State Pension, but anyone born after these dates gets the new State Pension instead, which is paid at a higher rate.
Pensioners getting the full new State Pension are expected to see payments rise from £230.25 per week to £241.30 in 2026, amounting to a weekly payment increase of £11.05 from April.
Over a full year this amounts to a total of up to £12,547.60 in pension payments (up from (£11,973), giving pensioners on the full rate 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 upward 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 confirmed in the Budget 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.”
