TL;DR
- The state pension will increase by over £550 annually from April, with the new state pension rising by £574.60 and the basic state pension by £439.40.
- The rise is driven by the triple lock policy, where wage growth at 4.8% was the highest determinant.
- This increase keeps the state pension below the income tax threshold for one more year, although it is projected to surpass it by 2027 if allowances remain unchanged.
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The state pension is set to rise by more than £550 a year from April under the triple lock, the government has said.
Under the triple lock policy, the state pension increases by whichever is highest out of inflation, wage growth and 2.5%.
Wage growth was the highest of the three figures at 4.8%.
Under this amount, the new state pension should rise by £574.60, while the basic state pension should go up by £439.40.
The boost is £120 more than if it had been pegged to inflation, according to the Treasury.
If the state pension goes up by the full £574.60, it will hit around £12,547 per year – just £23 short of the income tax threshold of £12,570, according to pension consultants LCP.
The old basic state pension would increase from £9,175 a year to £9,614 a year.
Steve Webb, partner at LCP, a pensions consultancy, previously told Money: “This will keep the headline rate of the state pension below the income tax threshold for one more year, but it will go above the tax threshold in 2027 if allowances do not rise.”
