By Robert Dalling
Copyright walesonline
New data released by the Office for National Statistics suggests the state pension could rise by 4.7% in April. Under the triple lock the state pension rises by whichever is highest out of 2.5%, the rate of wage growth, or the rate of inflation in September. This will be published next month but the rate of wage growth has come in at 4.7%, which is higher than the 4% inflation figure expected to be announced. Using that 4.7% figure the old basic state pension would increase from £9,175 per year to £9,607 per year while the rise the new state pension will take it to around £12,534 per year. Steve Webb, partner at pension consultants LCP, told Sky News : “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.” And head of public policy at investment platform AJ Bell, Rachel Vahey, said: “If, as is likely, the triple lock sees the state pension increase above the personal allowance of £12,570 in April 2027 for the first time then the government will come under increasing pressure to make a decision regarding either the personal allowance or whether it can sustain the triple lock as it has promised at least to the end of this Parliament. “Removing the freeze on the personal allowance would come at significant cost to the Treasury. “This is at a time when the chancellor’s fiscal headroom is already strained at best while an overhaul of the triple lock would come with huge political risk before the next general election. “Needless to say it’s a headache Starmer and Reeves could do without. “This is ahead of a crucial budget in November and economic and political pressure is already beginning to swell both within the Labour Party and outside of it.” BBC correspondent Emma Vardy explained of the new data: “It shows the average wage has increased by 4.7%, slightly higher than forecast. “Now one of the reasons that we pay attention to this figure [is because] it gives us an idea of how much many people’s pensions are likely to increase by next year. “And that is because anyone living in the UK who gets the full new state pension will see it go up each year either by the same as wages go up, or by inflation or by 2.5%, whichever is the highest. That’s known as the triple lock. And at the moment wage growth as we’re seeing is higher than inflation so it means this is the figure that pension rises will be linked to. “So figures in reality, well, it means we’re probably looking at pensions going up by over £500 in the spring, bringing it to around £12,000 a year. “So people who rely on that full new state pension can now have some idea how much their money will increase by. That won’t be fully confirmed until usually the budget speech in November.” Get daily breaking news updates on your phone by joining our WhatsApp community here . We occasionally treat members to special offers, promotions and ads from us and our partners. See our Privacy Notice .
