Chancellor Rachel Reeves has used her Autumn Budget to announce significant changes to the State Pension, confirming that millions of older people across the UK will receive a substantial income boost from next year.
Triple Lock Delivers Above-Inflation Increase
The central announcement confirms that 13 million pensioners will see their State Pension payments rise by an amount that outpaces inflation. The increase, set to take effect in April 2026, will be 4.8%. This figure is based on the average earnings growth measured between May and July, which was the highest of the three metrics used in the government's triple lock guarantee.
The triple lock is the mechanism that ensures the State Pension increases each year by the highest of three figures: September's Consumer Price Index (CPI) inflation, average earnings growth from May to July, or 2.5%. With September's CPI at 3.8% and earnings growth at 4.8%, the higher earnings figure has been selected for the 2026 uplift.
New and Old State Pension Weekly Rates
The increase will apply to both the New and the Old (Basic) State Pension, though the cash value of the rise will differ.
For those who reached State Pension age after April 2016 and are on the New State Pension, the full weekly amount will rise from £230.25 to £241.30. Over a full year, this represents an increase of £574.60, taking the annual total to £12,547.60.
For pensioners who reached State Pension age before April 2016 and remain on the Old State Pension, the full weekly rate will increase from £176.45 to £184.90. This is an annual cash rise of £440. The Chancellor highlighted that nearly two-thirds (64%) of state pensioners receive the Old State Pension, meaning the majority will see this slightly smaller cash increase.
Wider Implications and Pension Credit
The changes announced by the Department for Work and Pensions (DWP) have broader implications. The standard minimum guarantee for Pension Credit will also rise by 4.8% from April 2026, offering crucial support for the poorest pensioners.
Furthermore, the increase edges many pensioners closer to the income tax threshold. The new full State Pension of £12,547.60 is now just £22.40 below the current personal allowance of £12,570. This means millions are being drawn nearer to paying tax on their state pension income for the first time.
However, in a move to simplify the system, the Chancellor stated that individuals who are "only in receipt of the basic or new state pension" will not have to "pay small amounts of tax through Simple Assessment." This offers some administrative relief for those whose sole income is the State Pension.
The confirmed changes, set for implementation in April 2026, represent a significant financial commitment under the triple lock policy, aiming to protect pensioners' purchasing power in the coming years.
