From April 2026, people receiving the state pension are likely to see an increase of more than £500 a year, thanks to the government’s triple lock guarantee. This policy raises the pension each year by whichever is higher: 2.5%, inflation, or average wage growth. 

According to the latest Office for National Statistics figures, average earnings growth of 4.7% will be the measure used this year. 

• New state pension (for those reaching state pension age after April 2016):
  The weekly full rate is expected to increase to £241.05, or £12,534.60 a year – a rise of £561.60. 

• Old basic state pension:
  The weekly full rate is expected to rise to £184.75, or £9,607 a year – an increase of £431.60. 

The tax angle 

While the increase is welcome, there’s a catch. The personal allowance (the amount you can earn tax-free) is set to remain frozen at £12,570 until 2028. With the new state pension moving closer to that threshold, many pensioners could start paying tax on their state pension by 2027. 

Many retirees already pay tax if they have additional income, but this freeze, combined with rising state pensions, means more people will be brought into the tax net over the next few years. 

What this means for you 

The rise in the state pension will help offset higher living costs, but frozen tax thresholds may reduce the overall benefit. 

If you’d like tailored advice on how these changes could affect your income, please get in touch – we’d be happy to help.