The state pension is expected to increase by over £574 per year starting in April following the latest inflation data release today.
According to the triple lock policy, the state pension rises annually in April based on the highest of three factors: earnings growth from May to July, inflation in September, or a minimum of 2.5%.
Initially projected at 4.7%, the wage growth for May to July was revised upwards to 4.8% by the Office for National Statistics last week.
With inflation currently at 3.8% as of the latest announcement, it is likely that the wage growth figure will be utilized for the triple lock calculation.
Analysts at Hargreaves Lansdown predict that the full new state pension will increase from £230.25 per week to £241.30 per week in April 2026, resulting in a yearly rise from £12,547.60 to £13,122.20.
However, this increase is slightly below the personal allowance threshold of £12,570, indicating that many individuals may be subject to income tax on their state pension in the 2027/28 tax year.
The old basic state pension is set to rise from £176.45 per week to £184.90 per week (£9,615 annually).
These figures represent the maximum state pension amounts, but actual payments may vary based on individual National Insurance contributions.
Eligibility for the new state pension is based on birth year, with men born on or after April 6, 1951, and women born on or after April 6, 1953, qualifying. Most individuals require 35 qualifying years on their National Insurance record for the full amount.
For those born before these dates, the old basic state pension applies, with the number of qualifying years varying based on birth year and gender.
Currently, the state pension age is 66, set to gradually increase to 67 between 2026 and 2028, and further to 68 in the mid-2040s.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, emphasized that these pension increases are subject to confirmation in the upcoming Budget and could impact the ongoing review of the state pension age and the sustainability of the triple lock mechanism.