The UK full state pension is expected to rise by £902 to around £251 a week from next spring under the government triple lock rule.
The annual increase will push total yearly payments above £13,000, up from the current headline rate of £241.30 per week. Official wage growth figures scheduled for publication on September 15 are set to decide the matter.
Under recent economic data, total average earnings growth including bonuses reached 4.1 per cent, while Consumer Prices Index inflation stood at 2.6 per cent. Because wage growth is currently higher than both inflation and the baseline floor, the earnings growth figure is expected to determine the next pension rise.
People on the old basic state pension, paid to those who retired before April 2016, should see a rise from the current £184.90 a week to £192.50, taking their annual payment to around £10,000.
Triple lock calculation rules
The state pension triple lock pledge ensures that state pension payments increase every year by whichever is highest among inflation, average earnings growth, or 2.5 per cent.
The key wage growth figure used in the calculation covers total pay including bonuses in the three months to July, published in mid-September. The crunch CPI inflation rate figure is taken from September and published in October.
Whichever of inflation, average earnings growth, or 2.5 per cent is highest is used to set the state pension increase the following spring. The 2.5 per cent element keeps pushing the rate higher even in years when earnings and inflation are flat.
Tax threshold and pension top-ups
Not all elements that make up the state pension are increased according to the triple lock. People on the basic rate who retired before April 2016 also get top-ups, called S2P or Serps, if those were earned earlier in life.
Serps, the second state pension for those who earned it in the past, and the uplift for deferring payments rise by CPI inflation. The CPI rate was 3.8 per cent in the relevant month that decided annual rises last year, and the key figure for next year will be published in mid-October 2026.
From next year, unless the headline state pension is a pensioner's sole income, recipients will see at least some of it clawed back in income tax as it will bust the basic rate threshold of £12,570.
The Government says it is committed to letting older people off paying income tax if their only income is the full new or basic state pension without any increments, but details are still pending.
History of the state pension policy
The triple lock was introduced by David Cameron's Conservative Government in the 2011/2012 financial year to ensure pensioners receive a decent rise in income every year.
The last Tory Government sparked fury by scrapping the earnings element from the state pension rise in April 2022, because wage growth was temporarily distorted to more than 8 per cent due to the pandemic.
Instead, pensioners received a 3.1 per cent hike, using the inflation figure from the previous autumn before it started to soar. Since then, the last Government and the current Labour government have stuck to using the triple lock to set the annual state pension increase.
Before the triple lock was introduced, the state pension was increased in line with price inflation, going back to 1980. This infamously once led to a 75p increase, which caused huge anger against the Labour government in 1999 and the early 2000s.
The current Government has promised to keep the triple lock in place for the whole of this parliament.
In April 2026, the state pension rose by 4.8 per cent to nearly £12,550 a year prior to the upcoming adjustment.
Institute for Fiscal Studies cost warnings
Critics point out that maintaining the triple lock is expensive when public finances are in a straitened state. They have also questioned whether the elderly should get a bumper state pension increase during frequent periods when workers are handed below-inflation pay deals.
The Institute for Fiscal Studies (IFS) says state pension spending this year is expected to be £154 billion.
'The triple lock has increased annual spending on the state pension by around £16 billion, compared with uprating in line with average earnings growth since 2010,' it says. 'The triple lock’s ratcheting effect permanently locks in increases in spending. This is both costly and very uncertain in the long run, because it depends on the exact path of inflation and earnings.'
The IFS has in the past argued that the triple lock is disproportionately beneficial to better off people who tend to live longer. Meanwhile, it said using further increases to the state pension age to rein in the cost will affect poorer people who on average have a lower life expectancy.
It has suggested moving to the Australian system of a 'smoothed earnings link' after the next election.
Political debate and future outlook
Supporters of the triple lock say that pensioners have to struggle with the very real challenge of inflation while on a fixed income. Many depend solely on the state pension, and have a tough time paying food and energy bills.
The UK also has the lowest state pension among rich countries based on one of the most cited international measures, although that does not tell the whole story because some nations roll their state and workplace schemes into one system.
Aside from the moral case and fairness argument in favour of a full hike, elderly people tend to vote in high numbers. None of the major political parties want to upset this key voting bloc by denying them a decent state pension increase.
Pressure on public finances might force a change at some point, perhaps to a double lock system or 'smoothed' link similar to that suggested by the IFS. Discussion of whether the triple lock is affordable has ramped up again ahead of the Autumn Budget, due on 28 October.
However, even suggesting a 'review', or anything else short of a firm endorsement of the popular guarantee, would be politically risky. The main political parties will be reluctant to go into an election with a manifesto promise to ditch the triple lock, unless they decide to 'jump together', though this is considered unlikely.
