The state pension is expected to increase by 4.7% in April, benefiting numerous older individuals. This adjustment follows the triple lock policy, ensuring that the state pension rises by the highest of either inflation, wage growth, or 2.5%. Recent data from the Office for National Statistics confirms a 4.7% growth in average wages, indicating that the state pension is likely to align with this rate. With inflation currently at 3.8%, projections suggest that the full new state pension could rise from £230.25 per week to £241.05 per week in April 2026, equating to an annual increase exceeding £560.
For those eligible, the old basic state pension may increase from £176.45 per week to £184.75 per week. The eligibility for the full state pension amount varies based on an individual’s National Insurance contributions. Men born on or after April 6, 1951, and women born on or after April 6, 1953, qualify for the new state pension, requiring 35 qualifying years. On the other hand, individuals born before these dates may be entitled to the older basic state pension, with the number of qualifying years needed depending on birthdate and gender.
The current state pension age is 66 for both men and women, set to gradually increase to 67 between 2026 and 2028, followed by a further increase to 68 in the mid-2040s. Rachel Vahey, from AJ Bell, anticipates the new state pension to surpass £12,000 for the first time, potentially nearing the frozen personal allowance. This poses a challenge for policymakers as the state pension increase could surpass the personal allowance in April 2027, leading to decisions regarding the sustainability of the triple lock policy and fiscal implications for the Treasury. The upcoming Budget in November adds to the pressure, with economic and political factors influencing potential policy changes.