Millions of state pensioners are in line to receive a pay rise of over £460 next year, thanks to the “triple lock” policy.
Although the final figure will be confirmed by Work and Pensions Minister Liz Kendall before the Budget on October 30, the state pension is almost certain to increase by 4pc – the amount that average wages have increased by, according to figures from the Office for National Statistics.
The full new state pension will hit nearly £12,000 for the first time ever, with the change taking effect on April 7 2025. The “basic” state pension, paid to those who reached the state pension age before 2016, is also set to rise by around £353 to £9,167 annually.
But this pay rise comes at a massive cost to the Government, and questions have been raised about whether it might be changed, or scrapped altogether. At a time of mounting political pressure to get public finances under control, the state pension triple lock has become a key area of debate.
Here, Telegraph Money explains what the triple lock is, and how much pensioners will get from the state pension this year, covering the following:
The state pension is a regular government payment to support people throughout their retirement. It can only be claimed when you reach state pension age, which is currently 66 for men and women. However, this will start to gradually increase to 67 from 2026.
You also need to have enough qualifying years of National Insurance contributions.
Should next year’s state pension increase follow today’s wage figures, retirees who receive the full new state pension will see their payments rise to £11,962.60 for the 2025-26 tax year, up from £11,502.40 in 2023-24. This is for those who reached state pension age after April 2016 and have 35 qualifying years of National Insurance contributions.
The basic state pension, paid to those who reached state pension age before April 2016, will rise to around £9,167 – an increase of £353.
The triple lock policy was first introduced by the Coalition Government in its 2010 Budget, and came into force in 2011-12.
It promises to increase the state pension every April in line with either the previous September’s Consumer Prices Index measure of inflation (CPI), wage growth or 2.5pc – whichever is higher.
For 2025-26, the rise will almost certainly be in-line with wage growth, at 4pc, as it is likely to be higher than both inflation and 2.5pc.
For 2024-25, pensioners saw a bumper 8.5pc pay rise, the second largest ever, as the triple lock mirrored the increase in wages.
Retirees who receive the full new state pension get £11,502.40 for the 2024-25 tax year, up from £10,600.20 in 2023-24.
Those on the basic state pension receive £8,814 for this year.
The table below shows how the triple lock has seen state pension payments increase since 2011-12.
