The hike in April 2026 is set to be based on either September’s annual inflation figure or annual earnings growth from May to July.<\/p>\n
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State pension: Triple lock means the headline rate rises by the highest of inflation , earnings growth or 2.5 per cent<\/p>\n
Neither figure has been released but right now the average earnings growth including bonuses is strong. It currently sits at 4.6 per cent (April to June), outpacing inflation which creeped up to 3.8 per cent, the latest data showed.<\/p>\n
There’s still one month of data still to be released for wage growth and it is expected to outpace inflation.<\/p>\n
If this rate of wage growth was maintained, many pensioners could see a boost of as much as \u00a3551 to their annual payments.<\/p>\n
The potential surge in payments would be a welcome relief to vulnerable pensioners struggling on low incomes while facing a climb in energy bills and soaring living costs.<\/p>\n
But not all retirees will get the same rise in their annual pension payments.<\/p>\n
Why will some state pensions rise at a different rate?<\/p>\n
This \u00a3551 potential rise will only be received by those on the headline full, new state pension introduced from April 2016.\u00a0<\/p>\n
To get the full amount \u2013 as well as being the required age of 66 \u2013 you must have made sufficient National Insurance contributions during your working life, or have\u00a0bought voluntary NI top-ups, or received credits from the Government for years spent caring or for other reasons.<\/p>\n
Everyone retiring since April 2016 typically needs 35 years of contributions to get the new flat rate state pension.<\/p>\n
You need a minimum of 10 qualifying years to receive any state pension.<\/p>\n
People who reached state pension age before April 2016 receive a basic state pension, plus potentially hefty second state pension top-ups if they were earned during their working life.<\/p>\n
The basic state pension, which is currently\u00a0 \u00a3176.45 a week or \u00a39175.40 a year, will also rise according to the triple lock.\u00a0<\/p>\n
If you are on the maximum basic rate, that means a hike of\u00a0\u00a3422.<\/p>\n
However, the extra top-ups they received, called S2P or Serps and based on extra National Insurance payments they made earlier in their life, will rise line with inflation – which at the moment is looking like it will come in lower than wage growth.<\/p>\n
Last April, this element of the state pension rose according to inflation at 1.7 per cent. while the triple lock was 4.1 per cent because it was set in line with the rise in earnings.<\/p>\n
Some older people who earned enough in second state pension top-ups during their working years receive more than the headline new state pension rate.\u00a0<\/p>\n
Your browser does not support iframes.<\/p>\n
If you put off taking your state pension the extra portion you get for deferring is also raised according to inflation. Inherited elements of the state pension are linked to inflation too.<\/p>\n
We have a full rundown of how different elements of the state pension are increased every year here, <\/a>so you can check what you can expect to get if you are not on the new headline rate.\u00a0<\/p>\n Sir Steve Webb, a former pensions minister and now a partner at pensions consultancy Lane Clark and Peacock, told the Telegraph: \u2018It often comes as a surprise to people that the different elements of their state pension can rise by different amounts each year.<\/p>\n \u201cThe additional state pension, often called Serps, has always been linked to inflation, whereas the old basic state pension has benefited from a more generous formula since 2011.<\/p>\n \u2018Next April, the additional state pension will simply be linked to inflation as usual, but the basic pension will rise by the higher of inflation or wages growth \u2013 and until October, we will not know for sure which will be the key number.\u2019<\/p>\n Your browser does not support iframes.<\/p>\n Uplift could be less than expected\u00a0<\/p>\n If earnings growth plunges dramatically in the next month, September’s inflation figure will likely determine next year’s rise in payments.<\/p>\n The Bank of England predicts September’s inflation figure will be 4 per cent, which means the annual state pension would climb by almost \u00a3480 to \u00a312,452.<\/p>\n The official wage growth figures for May to July will not be released until mid-September while September’s inflation figure is revealed in October.<\/p>\n Pensioners pulled into tax system<\/p>\n If wage growth is used to set the headline state pension rate, it would fall short of the \u00a312,570 personal allowance threshold at which tax starts to be due \u2013 but only by \u00a346.<\/p>\n The personal allowance threshold has been frozen since April 2021, in a stealth tax grab and will remain so until at least April, 2028, when it is set to rise in line with inflation.<\/p>\n But the state pension has soared in the last few years and it is now at risk of breaching the tax threshold.<\/p>\n Forecasts from Deutsche Bank released earlier this year showed the state pension rising by 5.5 per cent to \u00a312,631 in April 2026, breaching the personal allowance threshold.<\/p>\n But newer analysis from Broadstone is more conservative in its calculations and it expects that retirees living on the state pension alone won’t be pulled into the tax system next year.<\/p>\n However, swathes of pensioners who have even a small income from personal or private pensions already breach the personal allowance limit and are liable to pay tax on any income over this amount.<\/p>\n People on the old basic state pension who earned sizeable second state pension top-ups are also on sums that are already above the tax threshold.\u00a0<\/p>\n