The state pension could rise by just over £500 a year next April, potentially taking it above tax-free personal allowance threshold, after the latest Office for National Statistics (ONS) earnings figures showed 4.1 per cent annual growth.

Under the triple lock, the state pension increases each year by the highest of average earnings growth, Consumer Prices Index inflation or 2.5 per cent.

Inflation is currently at 2.6 per cent and the Bank of England forecasts it will rise to around 3.2 per cent by Q4.

LCP noted that one more month (May-July 2026) of earnings data is needed for the final figure used in the triple lock.

However, if there is no change, a 4.1 per cent increase would add £9.90 per week to the new state pension, taking it from £241.30 to £251.20 – an increase of a little over £500 a year.

It would also take the state pension from just below the £12,570 tax-free personal allowance to around £500 above it.

The government has said pensioners wholly dependent on the new state pension, or the old ‘basic’ pension, will not pay tax, but has yet to explain how this will work, according to LCP.

LCP partner, Steve Webb, commented: “Under the triple lock formula, the new state pension will rise next April by the highest of the growth in wages, prices or 2.5 per cent.

“Based on today’s figures, it is highly likely that it will be average earnings growth which comes out on top. Unless things change sharply in the next month, those on the new state pension can expect to see an increase of around £500 per year next April.

“But the sting in the tail is that this will take the standard rate of the new state pension above the tax threshold.

“We therefore urgently need to know how the government plans to fulfil its pledge to make sure that those wholly dependent on the new state pension will not be charged income tax next year.”

LCP also said the old basic state pension could rise to £192.50 a week, an increase of just under £400 a year. These pensioners would also receive an inflation-inked increase on any ‘additional’ state pension they receive.

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