Everyone who gets the State Pension will be handed another £6,000 a year thanks to the Triple Lock, according to the latest figures.
The DWP is bound by law to increase the amount paid to those who receive the state pension each year thanks to the ‘Triple Lock’ system.
This sets out that everyone who is eligible for the handout from the Department of Work and Pensions must see an increase each year, either level with inflation, wage growth or by 2.5%, whichever is highest.
And the latest Consumer Price Index figures – which are those used to calculate the ‘inflation’ part of the Triple Lock – suggest that it could be a handy 5.7% increase for pensioners per month.
It means: Full New State Pension – £233.80 each week, £935.20 every 4-week pay period, £12,157.60 over the 2025/26 financial year, an increase of roughly £605 per year.
Full Basic State Pension – £178.40 each week, £713.60 every 4-week pay period, £9,276.80 over the 2025/26 financial year, an increase of roughly £121.92 per year.
Crucially, the amounts mean that pensioners will not have to pay tax (if they have no other income) because the amounts are under the £12,570 per year income tax threshold, so a ‘Triple Lock Plus’ won’t be needed just yet, whoever wins the election.
Steven Cameron, Pensions Director at Aegon, said: “For the April 2024 increase, earnings growth in 2023 produced an inflation-busting 8.5 per cent increase. In April 2023, a spike in inflation the previous year led to a record-breaking 10.1 per cent boost to the State Pension. These increases and the underlying high volatility that was present in both price inflation and earnings growth, have since raised serious questions over longer term affordability of the State Pension, which is paid for by today’s workers through National Insurance Contributions.
“With inflation having now fallen below the 2.5 per cent underpin, it’s likely to be earnings growth that determines next year’s Triple Lock increase, as the latest figures have this sitting at 5.7 per cent (for January to March 2024).
“The specific figure used for determining the Triple Lock will be the year-on-year increase in earnings for the period ending May to July 2024, which will be published in September. Barring a significant drop in earnings growth over the next few months, this figure will likely determine next year’s Triple Lock.”