It’s good news for pensioners as the figures released today show weekly payments will be higher than thought
A bumper state pension increase in 2026 will be even bigger, new figures suggest today(Image: Getty Images)
State pensioners are set to receive a larger increase next April, according to newly released figures, as reported by a BBC expert. The Office for National Statistics (ONS) announced this morning that regular wage growth had decreased to 4.7% in the three months leading up to August, down from 4.8% in the previous quarter, marking a new low in over three years.
However, Paul Lewis, presenter of Radio 4’s Money Box, stated that the wage growth figure for May-July this year, which is used in the triple lock calculations, has been revised upwards – from 4.7% to 4.8%. This indicates that people will be receiving more than initially expected.
He commented on X: “State pension to rise by more – subject to confirmation. Annual earnings growth May-July – used in state pension triple lock – revised up from 4.7% to 4.8%. So basic and new April weekly pension rates, estimated at £184.75 and £241.05, now £184.90 and £241.30. Adds £100mn+ to state pension bill.”
The most recent data shows that UK earnings growth has continued to slow as the unemployment rate reached its highest level in over four years. However, official figures also suggest that the jobs market may be stabilising.
The ONS reported that regular wage growth fell back to 4.7% in the three months to August, down from 4.8% in the previous three months, hitting a new low of more than three years.
The unemployment rate has risen to 4.8% in the three months leading up to August, an increase from the previous quarter’s 4.7%, marking the highest since January to March 2021, according to the Office for National Statistics (ONS). However, the ONS advises caution when interpreting these figures due to ongoing changes in their labour market survey.
Despite this, there are indications that the downturn in the job market is “levelling off”, with a slight increase in UK workers on payrolls – up by 10,000 between July and August, following a minor rise the previous month. However, early estimates suggest a drop of 10,000 during September, bringing the total to 30.3 million.
Liz McKeown, the ONS director of economic statistics, commented: “After a long period of weak hiring activity, there are signs that the falls we have seen in both payroll numbers and vacancies are now levelling off.”
She added: “We see different patterns across the age ranges with record numbers of over-65s in work, while the increase in unemployment was driven mostly by younger people.”
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Those receiving the new full state pension can expect an increase of over £500 annually starting next April. The triple lock guarantee ensures that the state pension rises every April in line with the highest of the following: total earnings growth from May to July of the previous year, CPI (Consumer Prices Index) inflation in September of the previous year, or 2.5%.
Earlier data from the ONS indicated that individuals with wage growth at 4.7% would see a full new state pension increase from its current level of £230.25 per week to £241.05 per week from April.
Those retiring on the basic state pension will see their weekly income rise from £176.45 to £184.75.
However, the new figures indicate that the new state pension would be £241.30 and the basic would be £184.90.
Martin Beck, chief economist at WPI Strategy, commented: “The latest UK labour market numbers suggest the jobs market may be stabilising after a period of softening.”
He further stated: “April’s rise in employer national insurance contributions and the sharp hike in the national living wage have clearly weighed on hiring, but figures over the summer suggest the worst of the damage is passing.
“Even so, the jobs market remains more fragile than at any time in recent years.”
Matt Swannell, chief economic adviser to the EY Item Club, said despite falling wage growth, the Bank of England will need to be convinced further that inflation pressures are easing before cutting interest rates again.
“We don’t expect the Bank of England to cut Bank Rate again until the first half of 2026,” he said.
(Image: Getty Images)