Using the government’s ‘triple lock’ formula, the UK state pension rises each year based on whichever of three economic measures is the highest. And whilst we won’t know the exact amount by which both the new and basic state pensions will increase next year until the September 2026 consumer price inflation rate data is released, recent information released by the Office for National Statistics has given us a pretty good indication.
What is the government’s triple lock rule?
The triple lock policy was introduced by the government back in 2012 in an attempt to bring millions of pensioners out of poverty. The rule takes into account three economic figures – inflation rate, average wage growth, and 2.5% – and ensures that the state pension annually increases by whichever of those figures is the highest.
Caroline Abrahams from Age UK said: “The triple lock is gradually pushing the state pension towards a level at which is will be enough to sustain a decent lifestyle in retirement, but we haven’t got there yet. Until we do, it remains an essential weapon in the battle against pensioner poverty.”
How much are the state pensions expected to rise by next year?
Well, recently released data from the Office for National Statistics revealed that wages grew by 4.1% between April-June 2025 and April-June 2026. The inflation rate is currently sat at 2.6% and the Bank of England reportedly estimate that this figure will rise to around 3.2% by Q4. This means that unless there is a sharp increase in inflation over the next month or so, it’s highly likely that average wage growth will determine how much the state pension increases in April.
If that figure remains the same, it is forecast that the new state pension will rise from £12,547 to £13,062 per year. This would, of course, take the new state pension slightly over the £12,570 tax-free allowance. But according to financial consulting firm, LCP, the government has said that those depending fully on the state pension will not have to pay tax on this income.
Not all pensioners will be eligible for the £515 increase, though. Those who reached state pension age before April 6, 2016 are on the basic state pension which currently sits at £9,615 per year. Retirees receiving the basic state pension are currently forecast to see it rise to £10,010 per year in April (an increase of just under £400).
Steve Webb, partner at LCP, said: “Under the triple lock formula, the new state pension will rise next April by the highest of the growth in wages, prices of 2.5%. Based on today’s figures, it is highly likely that it will be average earnings growth which comes out on top. Unless things change sharply in the next month, those on the new state pension can expect to see an increase of around £500 per year next April. But the sting in the tail is that this will take the standard rate of the new state pension above the tax threshold. We therefore urgently need to know how the government plans to fulfil its pledge to make sure that those wholly dependent on the new state pension will not be charged income tax next year.”
