Pensioners are tipped to be on course for a State Pension increase of 3.9% next April, with the triple lock set to push the full new State Pension above £13,000 a year for the first time.
The expected rise could give people receiving the full new State Pension an extra £9.40 a week, worth around £489 a year, taking their annual payments to approximately £13,036. But the increase comes with a potential sting in the tail for pensioners: the full new State Pension would rise above the frozen £12,570 Income Tax personal allowance, raising fresh questions about who will have to pay tax.
The Chancellor is expected to confirm the increase at next week's Budget, alongside further details of the Government's plans to protect certain pensioners from an Income Tax bill.
Triple lock confirms likely State Pension increase
Under the triple lock, the State Pension rises each April by whichever is highest of September's CPI inflation rate, average earnings growth or 2.5%.
The Office for National Statistics (ONS) reported that CPI inflation reached 3.5% in the year to September, up from 3.1% in August.
That is below the 3.9% average earnings growth figure already published, meaning wage growth is expected to determine next April's increase.
The final uplift is subject to official confirmation.
An important question for @JohnHealey_MP. Next April - Full new State Pension will likely rise to £13,040/yr - Tax-free personal allowance frozen at £12,570/yr So the full new State Pension would normally attract tax. Yet you've said you'll honour former Chancellor Rachel Reeves' promise that those whose ONLY income is the State Pension won't pay tax. But will that be a cliff edge? If someone gets say just £30/yr from a tiny pension from an old job, would they lose that protection and face around £100 in tax for just thirty quid income? And what about a little savings interest? Even if it's tax-free under the starting rate for savings, would it count as extra income and cost them the tax? This needs to be thought through when you tell us in the budget.
— Martin Lewis (@MartinSLewis) October 14, 2026
How much the State Pension could rise by
If the expected 3.9% increase is confirmed, pensioners receiving the full weekly rates would see the following changes.
New State Pension
- Current weekly rate: £241.30
- Expected new weekly rate: £250.70
- Weekly increase: £9.40
- Expected annual payment: around £13,036
- Annual increase: around £489
Basic State Pension
- Current weekly rate: £184.90
- Expected new weekly rate: £192.10
- Weekly increase: £7.20
- Expected annual payment: around £9,989
- Annual increase: around £374
The basic State Pension is paid to many people who reached State Pension age before April 2016.
Not everyone receives the full amount. Payments depend on individual National Insurance records, while some pensioners receive additional State Pension on top of their basic entitlement.
Recommended reading:
- Martin Lewis shares 'massively under-publicised' scheme that cuts council tax to zero
- Martin Lewis shares the 'bonkers' insurance trick could cut your bill in half
- Martin Lewis issues mortgage warning to anyone whose deal ends in the next year
State Pension rise raises fresh tax questions
The expected increase means the full new State Pension would exceed the £12,570 personal allowance, the amount most people can receive in taxable income before paying Income Tax.
The allowance has been frozen at £12,570 since April 2021 and is currently due to remain at that level until April 2031.
State Pension payments count as taxable income, even though tax is not normally deducted directly from the payments.
The Government has said pensioners whose only income is the new State Pension, or the old basic State Pension without additional increments, will not have to pay Income Tax as a result of the increase.
However, the precise arrangements have yet to be set out, with further details expected in the Budget.
Share