With the Pension Crisis looming over the UK, more and more Brits are feeling the pressures of financial insecurity as the cost of living and essentials continue to increase with no end in sight. Millions are on the State Pension, but for too long it has not covered all expenses. Now, a £562 payment boost to the State Pension could make a world of difference. The date of the increase has been confirmed, and soon, millions of Brits could benefit from a higher additional income. Add the date to your calendar today!

State Pension matters to millions of people

The State Pension in the UK may not always fully assist in making ends meet, but it still matters to millions of people. According to the UK Government, the total number of State Pension recipients is expected to grow by 55% in 2075. Additionally, the number of people aged 85 and older is expected to grow by 189% by 2075.

Data from The House of Commons Library has confirmed that, as of February 2025, the number of:

New State Pensioners are 4.7 million
Old State Pensioners are 8.57 million

The total of 13.1 million recipients is indicative of the importance of and reliance on the State Pension in the UK, as for many, it is a significant part of retirement income. It ensures financial security and stability for those who have chosen to retire by providing a reliable and stable retirement income. Now, pensioners can expect a £562 payment boost very soon!

The £562 payment boost for pensioners

According to a report by Birmingham Live, the new State Pension rate for 2026/2027 has been confirmed. The rate will increase by a significant 4.7% thanks to the ‘triple lock’ guarantee hitting pensioners. Under those terms, the State Pension will increase annually by whichever is the highest between these three factors:

The average growth in wages, or
The average inflation growth, or
The standard 2.5% growth

The growth in wages was confirmed to be the highest at 4.7%, resulting in the new State Pension increasing to £12,535 annually, which is a welcome increase of £562. Unfortunately, the significant increase may have dire implications for some pensioners, resulting in them having to kiss their extra pounds goodbye as soon as they receive them.

The implications of the increase in the State Pension

The increase in payments is expected to be implemented from April 2026. Experts argue that the increase will result in several Brits having to pay income tax for the first time due to frozen tax brackets. According to a Spencer Churchill Claims Advice spokesperson:

“The rise also brings the state pension close to the frozen personal tax allowance, meaning more retirees could end up paying income tax on their pension alone… Many pensioners who only rely on the state pension will soon find themselves paying tax for the first time, while those with workplace or private pensions are already there.”

As if that is not enough, there have been significant changes to Inheritance Tax, and families may need a vital £82 document, which will be more difficult to obtain from November. The pensioners’ age is also set to change soon, and it is becoming hard to keep up with all the changes.

Change is inevitable, but change does not have to result in negative implications for those who looked forward to the boost in their additional incomes. The increase may be significant, but at the end of the day, unless an increase to the threshold is introduced, the increase will result in millions paying tax on their State Pension in the near future. For more information on the changes that will be made to the State Pension, please have a look at the official statement from the UK Government.

Disclaimer: This content is informational only and does not supersede or replace the Department for Work and Pensions’ or HMRC’s own publications and notices. Always verify any specific dates and amounts by following the direct links in our article to the institutions or by consulting your local DWP field office or tax advisor.