The state pension is expected to increase by over £574 annually starting from April following the release of the latest inflation data today.
As per the triple lock guarantee, the state pension sees a rise each April based on the highest figure among earnings growth from May to July, September inflation rate, or a minimum of 2.5%.
Initially estimated at 4.7%, the wage growth for May to July has been revised upwards to 4.8% by the Office for National Statistics (ONS).
With inflation currently at 3.8% after the recent September announcement, it is likely that the wage growth figure will be utilized for the triple lock calculation.
Analysts at Hargreaves Lansdown project that the full new state pension will increase from £230.25 per week to £241.30 per week in April 2026, resulting in an annual rise from £12,547.60 to £13,122.20.
However, this increase brings the state pension just below the personal allowance threshold of £12,570, which may lead to some individuals paying 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).
While these figures represent the full state pension amounts, individual payments may vary based on National Insurance contributions.
Men born on or after April 6, 1951, and women born on or after April 6, 1953, are eligible for the new state pension, requiring at least 35 qualifying years for the full amount.
For those born before these dates, the older basic state pension applies, with the number of qualifying years varying based on birthdate and gender.
The current state pension age is 66 for both genders, set to rise gradually to 67 between 2026 and 2028, followed by a further increase to 68 in the mid-2040s.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, highlighted that these pension increases are subject to confirmation in the upcoming Budget, forming part of the ongoing state pension age review amidst a growing elderly population.
She emphasized the potential for further state pension age adjustments and debates on the long-term sustainability of the triple lock mechanism beyond the current Parliament.