Wage growth is expected to be used to uprate the state pension under the triple lock next month, after the latest data from the Office for National Statistics (ONS) revealed that annual growth in earnings (including bonuses) was 4.5 per cent for the April-June 2024 period.

Under the triple lock, state pensioners receive an annual increase equal to the highest of price inflation, earnings growth, or a minimum rate of 2.5 per cent.

Industry experts noted that whilst this is down from 5,7 per cent last month, this figure is still “far higher” than inflation or 2.5 per cent, meaning it is likely that wages will be the figure taken for state pension uprating using the triple lock.

Indeed, Aegon pensions director, Steven Cameron, noted that whilst not yet certain, the latest official average earnings figures give the best indication yet of by how much the state pension will increase next April under the triple lock, since the Labour government has confirmed will remain in place.

“With the latest inflation figure sitting at 2 per cent, even if we see modest increases in coming months, it’s highly likely that the increase will be based on earnings growth," he continued.

"Barring any big fluctuations when July’s earnings figures are added in, this suggests state pensioners may receive around a 4.5 per cent increase."

Whilst next month’s figure is the one that would be used in the calculation, analysis from Hargreaves Lansdown showed that, if wage growth remained at the current level, the new state pension would get a boost of around £517.

“Such a rise will be welcomed by pensioners still emerging from the cost-of-living crisis," Hargreaves Lansdown head of retirement analysis, Helen Morrissey, said.

However, she acknowledged that many are still reeling from the news that their Winter Fuel payment is to be taken away, meaning "it won’t be quite the boost that many hoped for".

“There’s another looming challenge - frozen tax thresholds mean that the full new state pension is creeping ever closer to tax paying territory and a similar rise next year could see it surpass it," she added.

"With these freezes in place until 2028, there’s every chance, we could see pensioners solely reliant on the state pension finding part of it is making its way to the taxman."

Hargreaves Lansdown also warned that inactivity rates of over 50s could have “catastrophic” effects on saving for retirement.

“In terms of the working population, economic inactivity due to long-term sickness remains a huge concern," Morrissey added.

"This spans all age groups but the majority of those affected are in the 50-64 age group. Being unable to work during this period can have catastrophic effects on people’s ability to prepare for a decent retirement, as well as managing day to day."

Cameron also warned that while the triple lock may be safe for the next five years, the government is clearly looking for ways to balance the nations finances.

"It recently announced it would not take forward a new deal on social care funding, planned by the previous government, which would have capped how much an individual needs to pay for eligible care costs at £86,000 rather than many facing an unlimited bill," he added.

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