State pensioners who retired before 2016 are on track for a £395 annual increase, taking the basic state pension to £10,010 from April 2027. The rise, driven by the Government's triple lock, follows wage growth figures of 4.1% for May to July, which outpace the July inflation rate of 2.9%.
Early details of the pension payments were revealed ahead of Chancellor John Healey's first Budget in October, where the exact amounts are expected to be confirmed. The basic state pension, paid to everyone who retired before 2016, is set to climb by £395, according to current forecasts.
Triple Lock and Wage Growth
Increases to the state pension each year are determined by the Government's triple lock, which raises payments in line with whatever is highest out of inflation, wage growth, or 2.5%. As it stands, wage growth looks likely to be the highest of these three figures once again, currently sitting at 4.1%.
The Government relies on wage figures from May to July, so it's a useful indication of how pensions might rise next year. New rates will come into effect from April 2027, and another big above-inflation rise based on wages is only likely to result in calls to scrap the triple lock to grow louder.
Full State Pension Rise
People who have retired since 2016 receive the different, full version of the state pension. Payment amounts are higher, and on course to jump by £515 to £13,062 from next April. Older pensioners may receive other top-up payments to make up for the gap between the two rates.
Many economists argue the policy is too expensive and goes up too much every year. The older version of the pension is gradually being phased out with each passing year.
