Some may see payments rise by more than £500 per year.
State pension forecast to rise by 4.7% in April under triple lock – what rate to expect (Image: Getty)
Millions of state pensioners could see their payment rates rise by more than £500 from next April, based on official wage figures. The Office for National Statistics (ONS) reported that total pay grew by 4.7% in the three months leading up to July.
Under the “triple lock” guarantee, the state pension rises each April in line with the highest of three measures: average earnings growth between May and July, CPI inflation in September, or 2.5%. As inflation is expected to be lower than wage growth, with most anticipating an increase of 4% to be announced in September, the wage figure is likely to be used for the calculation. However, the figures may be revised in next month’s data, and the Government will confirm the planned increase in the autumn. Based on the latest wage figures from the ONS, it’s likely that state pensioners will see the following increase in their payment rates:
Some pensioners could see their payments uprated by more than £500 a year (Image: Getty)
The full new state pension
The weekly flat rate for the full new state pension is expected to rise to £241.05, up from £230.25. This will take the annual rate up to £12,534.60, marking an increase of £561.60.
The new state pension is available to:
- Men born on or after April 6, 1951
- Women born on or after April 6, 1953.
To receive any rate of state pension, people must have at least 10 qualifying years on their National Insurance record. The number of qualifying years on this record is used to determine how much state pension a person will receive, but usually, to get the full rate, a person should have at least 30 years.
The full basic state pension
The weekly flat rate for the full basic state pension is expected to rise to £184.75, up from £176.45. This will take the annual rate up to £9,607, marking an increase of £431.60.
The full basic state pension is available to:
- Men born before April 6, 1951
- Women born before April 6, 1953.
Pensioners who qualify for the basic state pension can also qualify for an “additional” state pension, also known as the State Earnings-Related Pension Scheme (SERPS), which may provide them with some extra financial support.
Subsequently, it’s claimed that pensioners who receive SERPS can be better off than those on the new state pension. An analysis by Money Mail in 2024 showed that older retirees in their 80s and 90s can receive up to £20,176 annually, which is much higher than the new state pension rate.
Despite the welcome uprating news, state pensioners have been warned that more may be dragged into the income tax net.
The personal allowance, which has been frozen since 2021, is currently £12,570. Based on the estimated new rates, pensioners on the full new state pension are “just a whisker” away from paying income tax. ”
A Freedom of Information request by investment company Vanguard showed that, due to the allowance freeze, 2.1 million more state pensioners have had to pay tax on their income compared to the 2021/22 tax year.
James Norton, head of retirement and investments at Vanguard Europe, said: “The state pension is key to most people’s retirement plans. The fact that it’s increasing is good news for retirees, because much of their basic expenditure will be covered with this guaranteed income.
“For those with other sources of retirement income, given the personal allowance remains frozen at £12,570 and the higher-rate tax threshold has stayed at £50,270, a considered approach to tax and retirement is needed to make sure you keep as much of your hard earnt savings as possible.”
