Chancellor John Healey will deliver the autumn Budget on Wednesday, October 28 (Image: Getty)
New State Pension payments for the 2027 to 2028 tax year are due to be confirmed under Chancellor John Healey later this year.
The new Chancellor confirmed this week that the date of the autumn Budget will be on Wednesday, October 28, which will set out spending and borrowing plans for the year ahead. Within the Budget announcement, the payment rates for both the new and basic State Pension for the next tax year will be confirmed, meaning pensioners will soon learn how much extra cash they will get from next April. The government raises both the basic and new State Pension rates at the start of every new tax year on April 6, with the increase determined by the triple lock.
The triple lock is a UK government guarantee that the State Pension will go up every April by whichever is the highest out of three measures: the consumer price index (CPI) measure of inflation (measured for September the year before), average wage growth between May and July of the previous year, or 2.5%.
In the current tax year, the new and basic State Pension increased in line with average earnings at 4.8%, as this was the highest out of the three measures.
The change took the full rate of new State Pension from £230.25 to £241.30 per week, while the full basic State Pension increased from £176.45 to £184.90 per week, giving those eligible for the full amount an annual cash boost of £574.60 or £439.40 respectively.
Prime Minister Andy Burnham has previously suggested he will stick to the 2024 Labour manifesto and protect the triple lock, so if he follows through on this pledge, new State Pension and basic State Pension claimants can expect a payment rise of at least 2.5% in the next tax year, as this is the minimum floor for increases.
Unless a radical change to State Pension rules is announced, the Chancellor will confirm how much rates will rise under the triple lock in the Budget on October 28.
Confirming the Budget date in a video message on Friday, Mr Healey said: “This government is working fast to restore hope and back Britain’s communities.
“In the past two weeks, we have begun to kickstart growth in every postcode. We have backed British jobs, British skills and British businesses. And we have provided just a bit of breathing-space for those families and businesses that feel so squeezed, that feel without hope.
“Today, I’m confirming the date of my first Budget as Chancellor will be Wednesday, October 28. This will be a Budget that moves money and power out of Westminster, and into every postcode around Britain.
“It will be built on fiscal discipline. It will meet our fiscal rules. It’ll give businesses and families some of the stability they need to plan for the future. Now, let’s get on with the job.”
Mr Healey has pledged to deliver a Budget that “moves money and power out of Westminster” and said it will be “built on fiscal discipline”.
The former defence secretary has already told the Cabinet to be prepared to make cuts to pay for the new PM’s spending pledges and said he will be “watching closely” to protect the public from unfair prices at petrol pumps and in supermarkets as the Iran war continues to hit prices.
But Mr Healey will face significant challenges as he finds more money for Mr Burnham’s devolution priorities and increased defence spending amid warnings the Iran war will further squeeze the public finances.
The Chancellor said the new government has “begun to kickstart growth in every postcode” but experts have warned Mr Healey will need to raise taxes or cut spending elsewhere as pressure on the public finances has left no room for extra borrowing.
Stephen Millard, National Institute of Economic and Social Research (Niesr) deputy director for macroeconomics, suggested Mr Healey should look at the welfare bill or the pensions triple lock as areas for potential cuts, while also suggesting raising income tax, which would break Labour’s 2024 manifesto pledge not to raise that levy, national insurance or VAT.
But that pledge, along with the fiscal rules set by former Chancellor Rachel Reeves on borrowing, are likely to constrain Mr Healey’s room for manoeuvre.
Shadow chancellor Sir Mel Stride said the announcement of the budget date meant “89 more days of unfunded spending commitments and damaging tax speculation until we get some details”, and “89 more days for Brits to wait before they know how much their taxes are going to go up to fund Burnham’s spending addiction”.
He added: “Only the Conservatives have a plan to cut spending by £50 billion starting with the welfare bill, so we can cut taxes, lower your bills and back business to deliver a stronger economy and a stronger country.”