The full state pension is set to rise by £515 a year to £13,062 under Prime Minister Andy Burnham's commitment to the triple lock, according to analysis of the latest figures.
The current full rate of £12,547.60 is expected to increase by 4.1 per cent, as wage growth becomes the decisive factor among the three triple lock metrics. Inflation stands at 2.6 per cent, while the third metric is 2.5 per cent.
Wage growth drives increase
Former Liberal Democrat pensions minister Sir Steve Webb, now a partner at pension consultants LCP, said it was "highly likely" that average earnings growth would determine next year's increase. He stated: "Unless things change sharply in the next month, those on the new state pension can expect to see an increase of around £500 per year next April."
The full rate applies to state pensioners born after 1951 for men and after 1953 for women. Next year, those born after 1951 will be 76 years old.
Tax threshold concerns
Mr Webb warned of a "sting in the tail", as the increase would push the standard new state pension above the income tax threshold. This could mean some pensioners face tax on their state pension for the first time.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: "This could prove to be an interesting figure for state pensioners as next month's data is a key part of the formula for the state pension triple lock." She added: "With inflation standing at 2.6 per cent, this suggests, barring a shock inflation spike over the next couple of months or collapse in average wage growth, that wages will be the element used."
Pensioners urged to boost savings
Ms Morrissey described the potential rise as an "inflation-busting increase" that would be welcomed by pensioners, but warned that the state pension on its own "does little more than cover the essentials". She advised: "If you want more from your retirement, then you need to make the most of your workplace and personal pensions."
The increase, if confirmed, would take the full state pension to over £13,000 a year, providing a significant boost for pensioners under 76 next year.
