ONS figures suggest the state pension will rise 4.7% in April 2026 to £12,534 a year – just shy of the £12,570 tax threshold – and, Steve Webb notes, the triple lock means it will exceed that level by 2027.
New figures from ONS published today (16th Sept) show that the state pension is likely to increase by around 4.7% in April 2026, taking the new state pension to £12,534 per year – less than a pound a week short of the income tax threshold of £12,570. With the triple lock formula guaranteeing an increase of at least 2.5% the following year, the headline rate of the new state pension is certain to exceed the current tax threshold by 2027.
The ’triple lock’ formula provides that the state pension will rise by the highest of:
- The growth in average earnings (including bonuses) in the three months to July 2025 – this morning’s figures put that at 4.7%, though today’s figure could be subject to later revision, up or down;
- The growth in CPI inflation in the year to September; inflation in the year to July was 3.8%, and August’s figures will be published tomorrow (Weds 17th); the September figure which feeds in to the triple lock will be published in mid October; if inflation continues to rise, it is *possible* (though unlikely) that this could exceed the earnings growth figure, though the Bank of England recently estimated that CPI would not exceed 4.0% this year;
- A floor of 2.5%, which will not be relevant this year;
If pensions do end up rising by 4.7%, the new rates of the (old) basic state pension and the new state pension are shown in the Table, both in pounds per week and pounds per year.
| 2025/26 | 2026/27 | 2025/26 | 2026/27 | ||||
| £pw | £pw | increase | £pa | £pa | increase | ||
| Basic state pension | £176.45 | £184.75 | +£8.30 | £9,175.40 | £9,607.00 | +£431.60 | |
| New state pension | £230.25 | £241.05 | +£10.85 | £11,973.00 | £12,534.60 | +£561.60 |
For pensioners who receive ‘additional state pension’ (also known as SERPS or State Second Pension) on top of their basic pension, this additional element will be increased in line with the CPI figure for the year to September.
An increase of 4.7% in the headline rate of the pension would actually be slightly more than the 4.6% assumed by the OBR in its March 2025 ‘Economic and Fiscal Outlook’ which fed into its assessment of the state of the public finances at the time.
An April 2026 increase of 4.7%, followed by a further increase of (at least) 2.5%, would take the new state pension to at least £12,850 in April 2027 – above the expected level of the tax threshold.
Commenting, Steve Webb, partner at pension consultants LCP said:
“The standard rate of the new state pension is creeping ever closer to the frozen personal tax allowance. Indeed, we know for certain that someone who has no other income aside from the new state pension will be a taxpayer come April 2027. It is already the case that nearly three quarters of all pensioners pay income tax, and the ongoing freeze in tax thresholds coupled with steady rises in the pension will drag more and more into the tax net”.
