State pension set for 4.7% rise under triple lock, worth about £500

The state pension looks set to rise by 4.7% next year under the government's "triple lock" rule, a move that would add about £500 a year for a full new-state pensioner.

Official figures published on Tuesday showed the wages metric used in the triple lock at 4.7%, which would be the highest of the three measures — wages, inflation and 2.5% — and therefore determine the increase. If confirmed, the new state pension for those who reached retirement age after April 2016 would rise to £241.05 a week, or £12,534.60 a year, from April.

The basic, or "old," state pension would increase to £184.75 a week, or £9,607 a year. Industry analysts said the uplift is likely to be confirmed because the September inflation figure, which will be published next month, is currently lower than the wages measure. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said pensioners were "on course" for a 4.7% uplift as average wage growth remained robust, but stressed the final outcome depended on the forthcoming inflation read.

The projected rise comes as the full new-state pension level would sit only marginally below the personal tax allowance of £12,570, raising the prospect that more retirees could face income tax on their state pension in the near future. Analysts said the near convergence of the new-state pension and the personal allowance increases the likelihood that some pensioners who rely heavily on the state pension could become liable for tax unless their total income remains below the threshold.

Under the triple lock, state pension payments increase by the highest of average wages, the Consumer Prices Index measure of inflation, or 2.5%. The wages metric published on Tuesday covers average pay growth over the relevant period and is one of the three statutory comparators used to set next spring's increase.

Labour politician Rachel Reeves has said she will adhere to the triple lock rules for state pensions. Government officials and pensions experts noted that while the wages figure currently appears decisive, the September inflation number — to be released next month — could alter the calculation if it comes in higher.

Pensioner groups and financial advisers said the prospective rise would provide welcome relief for many retired households still facing elevated living costs, while also flagging the tax interaction. Commentators cautioned that for those with modest private pensions or other limited income sources, entitlement and means-testing rules for other benefits could influence net outcomes.

The increase, if confirmed, will take effect from the start of the new financial year in April. Ministers will publish final figures once the full set of comparator data is available and the statutory uprating process is complete.