Initial details of potential increases to the state pension for 2026/27 have been disclosed, giving over-65s an idea of what they can expect from next April. Pension payments are set to rise by hundreds of pounds under Andy Burnham, according to new figures.
The pension rate each year is determined by the Government's triple lock. Based on latest stats, wage growth looks set to be the highest of the three figures once again, with the rate currently sitting at 4.1%. The Government uses wage figures from May to July, so it's a useful indication of how pensions might rise. The wage figure is higher than the July inflation rate of 2.9%.
Full State Pension Increase Details
If the 4.1% figure remains the same, the full state pension would rise by £515 to £13,062. This works out to £1,088 a month. This version of the pension is paid to over-65s who have retired since 2016.
The basic pension, for everyone who retired before that date, would rise by £395 to £10,010. New pension rates will come into effect from April 2027.
Budget Confirmation Expected
Details are expected to be confirmed by new Chancellor John Healey at the Budget in October. The announcement will confirm the exact figures for the upcoming tax year.
DWP benefits like Universal Credit rise based on the CPI inflation rate each September. So at the moment those payments will rise by a smaller amount. This is one of the reasons the triple lock is often criticised as pension payments often rise above the rate of inflation, making it very expensive for the country.
Impact on Pensioners
The increase means pensioners who retired after 2016 could see an additional £515 per year, while those on the basic pension would gain £395 annually. The changes will take effect from April 2027, with the official confirmation expected in October's Budget.
