New analysis from Broadstone suggests the state pension is set for another significant uplift under the government’s Triple Lock policy.
With average earnings growth, including bonuses, currently running at 4.6% – and just one month of data still to be published – increases are expected to outpace inflation.
If this rate were maintained in September, the new state pension would rise annually by £551, taking it to around £12,524 a year from £11,973.
While the increase is unlikely to be enough to tip the full new state pension over the personal tax allowance, it is still likely to cause even more pensioners to be liable for income tax given the ongoing freeze to the personal tax allowance at £12,570 a year.
The latest HMRC data shows 8.7 million people of state pension age or older are projected to pay income tax on retirement income in 2025/26, a rise of around 420,000 compared to the previous year and a rise of 1.85 million from ten years ago.
David Brooks, head of policy at Broadstone, said: "Another significant increase to the state pension now looks inevitable given the strong growth in average earnings and rising inflation.”
