People receiving full new state pension on course for £12,548 from April

Pensioners remain on course for a 4.8% rise in the state pension next year, after Office for National Statistics (ONS) figures were released on Wednesday.

Under the triple lock guarantee, the state pension increases every April in line with whichever is the highest of total earnings growth in the year from May to July of the previous year, Consumer Prices Index (CPI) inflation in September of the previous year, or 2.5%.

ONS figures released on Wednesday showed CPI inflation for September was 3.8% in September, remaining at the same level as both July and August.

Previously-released figures showed total wage growth including bonuses for the quarter to July was 4.8% – making this the key figure expected to be used for next year’s state pension increase.

The Secretary of State for Work and Pensions is required by law to undertake an annual review of the state pension and benefits and the outcome will be announced in November.

The expected 4.8% increase means that people receiving the full new state pension could receive £241.30 per week – or around £12,548 per year.

Those on the full basic state pension could see their weekly payment rise to around £184.90.

Many pensioners do not receive the full state pension, with national insurance records counting towards how much people will receive.

Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, said: “For pensioners, the latest inflation data suggests another inflation-beating boost to the annual state pension payment is coming their way next April.”

But she said the anticipated uplift would tip some pensioners closer to the point where they could be liable for income tax.

Ms Haine said: “The personal allowance has remained at £12,570 since the 2020-21 tax year, so unless the Chancellor revises this in the Budget, more retirees may find themselves paying a tax bill. Of course, some will already be paying tax on their retirement income, either because they deferred access to the state pension or because they also receive income from a private pension.”

A report for Standard Life, which involved a survey of 6,000 people by Ipsos in June, found that less than a third (29%) of people believe the triple lock will still be in place when they reach retirement.

Catherine Foot, director of the Standard Life Centre for the Future of Retirement, said: “Standard Life’s retirement voice 2025 report shows just how uncertain people feel about their financial futures, with confidence in the future of the state pension especially low.

“Many doubt whether it will exist in its current form by the time they retire, even though there is no indication from policymakers that such a change is likely.”