Pensioners are likely to get a rise of up to £560 a year next year after total pay including bonuses rose by 4.7%.
Under the “triple lock” policy, the state pension goes up each year by the highest of 2.5%, the rate of inflation, or average earnings growth.
The new flat-rate state pension – for those who reached state pension age after April 2016 – is expected to increase to £241.05 a week. That will take it to £12,534.60 a year, a rise of £561.60.
The old basic state pension – for those who reached state pension age before April 2016 – is expected to go up to £184.75 a week, taking it to £9,607 a year, a rise of £431.60.
Not all pensioners get the full amount, because it depends on years of qualifying contributions through the National Insurance system.
Andrew Tully, technical services director at Nucleus said: “It looks like we will get another relatively substantial increase to the state pension from April 2026 which will be a welcome boost to many pensioners.
“However it means many more will pay income tax solely as a result of their state pension given the ongoing freeze to the personal allowance, and Government will need to consider the best process to easily allow these people to pay tax.”
The rise in the state pension will be welcomed particularly by low pay organisation but it will add pressure on the government as it is the second-largest item in the budget after health spending.
However, the new data on pay from the Office for National Statistics, may also offer some relief on inflation as wage growth has fallen back to its lowest level for more than three years.
This is partly a result of firms clamping down on hiring.
The ONS said regular wage growth, excluding bonuses, dropped to 4.8% in the three months to July, down from 5% in the previous three months and the lowest since May 2022.
The rate of unemployment remained unchanged at 4.7%
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