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UK state pension likely to rise by £488 under triple lock

newsSep 15, 202615277

The full, flat-rate state pension is expected to rise by £488 a year from April, taking the new flat-rate pension to about £250.70 a week or £13,036.40 a year, based on a 3.9% rise in average earnings. The increase is driven by the UKs triple lock, which guarantees the state pension will rise by the highest of average wage growth, inflation, or 2.5%. Almost 13 million people receive the state pension and, if the 3.9% rise holds, the flat-rate pension would move above the personal allowance of £12,570 and become liable for income tax. State pension spending is already forecast at £154 billion this year and independent forecasts suggest it could add about £600 million a year by 2029-30. Ruth Curtice, chief executive of the Resolution Foundation, called the policy "crazy" and warned of a "ratchet effect" lifting pensioners' living standards faster than typical workers. Jonathan Cribb, deputy director at the Institute for Fiscal Studies, said each increase builds on the last so the long-run cost is substantial but very uncertain. Labour pledged to keep the triple lock until 2029, while Business Secretary Jonathan Reynolds declined to confirm an exemption from income tax for pensioners reliant solely on the state pension.

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