Millions of pensioners in line for a boost to bank balances
Chancellor Rachel Reeves.
Rachel Reeves is set to confirm a major boost for millions of pensioners.
The new full state pension rate for 2026/27 is expected to rise by £575, based on latest wage growth figures.
The Chancellor will confirm the new rates at the Budget on November 26.
READ MORE: Rachel Reeves confirms £586 a month boost for Universal Credit claimants
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The full pension – paid to around five million people who retired after 2016 – is expected to go up to £12,548.
The older basic state pension is around £3,000 lower, though these people also get additional top-up payments.
The amount is determined by the triple lock policy.
This ensures the pension rises each year to match whatever is highest out of inflation, wages and 2.5%.
Ms Reeves will set out the state of the nation’s finances at the autumn Budget.
However, the latest rise to pensions is pushing more older people towards paying income tax.
This is because tax bands have remained frozen since 2021 as pensions have continued to rise.
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The state pension is on course to surpass the personal allowance – the point at which someone starts paying income tax – in 2027 without Government intervention.
A spokesperson for Spencer Churchill Claims Advice said: “Pensioners can expect a slightly bigger uplift next year than initially predicted.
“While the difference may seem marginal, every pound matters when it comes to covering rising living costs.
“If the triple lock remains in place, it is highly likely that by April 2027 the full state pension will actually surpass the personal allowance threshold.
“That would mean some pensioners paying income tax purely on their state pension, something the Government will find politically difficult to justify.”