It would give older pensioners receiving the full basic State Pension a weekly payment increase of £8.45 from April 2026.
DWP handing state pensioners born before 1953 weekly payment increase
State pensioners born before 1953 are set to receive a weekly payment increase from the Department for Work and Pensions ( DWP ) in April next year.
Under the triple lock policy, the state pension increases by whichever is highest out of inflation, wage growth and 2.5%. Wage growth was the highest of the three figures at 4.8%.
Under this amount, the new state pension should rise by £574.60, while the basic state pension should go up by £439.40. The boost is £120 more than if it had been pegged to inflation, according to the Treasury.
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If the state pension goes up by the full £574.60, it will hit around £12,547 per year – just £23 short of the income tax threshold of £12,570, according to pension consultants LCP.
The old basic state pension would increase from £9,175 a year to £9,614 a year.
Steve Webb, partner at LCP, a pensions consultancy, previously told Money: “This will keep the headline rate of the state pension below the income tax threshold for one more year, but it will go above the tax threshold in 2027 if allowances do not rise.”
To qualify for the basic State Pension, you must have reached State Pension age before April 6, 2016, and have enough National Insurance (NI) qualifying years.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, said: “For pensioners, the latest inflation data suggests another inflation-beating boost to the annual state pension payment is coming their way next April.”
She added: “The personal allowance has remained at £12,570 since the 2020-21 tax year, so unless the Chancellor revises this in the Budget, more retirees may find themselves paying a tax bill.
“Of course, some will already be paying tax on their retirement income, either because they deferred access to the state pension or because they also receive income from a private pension.”