The New and Basic State Pensions are set to rise by 4.1 per cent from April under the Triple Lock policy. The measure guarantees that the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July (4.1%), CPI in the year to September (1.7%), or 2.5 per cent.
This means that under the earnings growth figure of 4.1 per cent, people on the full New State Pension will see payments rise by £9.05 per week from £221.20 to £230.25 and as the payment is typically made every four weeks this amounts to £921. Someone on the full Basic State Pension will see weekly payments rise by £6.95 per week from £169.50 to £176.45, or £705.80 every four-week payment period.
However, retirement expert Helen Morrissey warns that an ageing population coupled with a shrinking workforce is putting the state Pension – and its uprating mechanism – under pressure, which could lead to changes in the future.
The head of retirement analysis at Hargreaves Lansdown explained: “The State Pension forms the very backbone of our retirement income – there are very few people who are not reliant on it to some extent. However, a combination of an ageing population and shrinking workforce has put it under pressure, leading to concerns as to how it can remain sustainable long-term.
“There is ongoing debate as to whether the Triple Lock should remain as the measure used to uprate the State Pension or whether it is too expensive. Other rumours centre on whether State Pension age will need to rise further or if State Pension should actually be means-tested.”
Ms Morrissey continued: “Such rumours can be concerning, but our research shows that only one in ten people don’t believe the State Pension will exist by the time they get to retire. A further 21 per cent said not only did they believe the State Pension would still exist, but that the Triple Lock would still be used to uprate it on an annual basis.
“A further quarter (24%) said they thought the State Pension would still be a feature, although they didn’t expect the Triple Lock would survive. One in five thought there may have to be some kind of means-testing put in place.”
The survey also suggested there is a lot of uncertainty out there. Over a quarter of people said they didn’t know if the State Pension would still be around by the time that they retire.
Ms Morrissey said this is a “certainty that people need if they are to plan for the long-term”. She continued: “The State Pension and the Triple Lock’s role within it needs to be at the heart of the government’s ongoing pension review to make sure it is put on a sustainable footing so people can plan for their future without fear of major change.
“Knowing what you can expect to get from the State Pension, and at what age, gives you a firm foundation on which to plan the rest of your retirement. It will give you a better idea of how much you need to save into pensions such as SIPPs, so you get the retirement that you have planned for.”
To check your own future State Pension payments, use the online forecasting tool on GOV.UK here.
State Pension payments 2025/26
New and Basic State Pensions will rise by 4.1 per cent from April 7, additional State Pension elements will rise by the September CPI inflation rate of 1.7 per cent.
A full list of the new payments can be fond on GOV.UK here.
Full New State Pension
- Weekly payment: £230.25 (from £221.20)
- Four-weekly payment: £921 (from £884.80)
- Annual amount: £11,973 (from £11,502)
Full Basic State Pension
- Weekly payment: £176.45 (from £169.50)
- Four-weekly payment: £705.80 (from £678)
- Annual amount: £9,175 (from £8,814)
Future State Pension increases
The Labour Government has pledged to honour the Triple Lock or the next five years and the latest predictions show the following projected annual increases:
- 2025/26 – 4.1% confirmed, the forecast was 4%
- 2026/27 – 2.5%
- 2027/28 – 2.5%
- 2028/29 – 2.5%
- 2029/30 – 2.5%
Recent analysis released by Royal London revealed only around half of people receiving the New State Pension last year were getting the full weekly amount – and around 150,000 were on less than £100 per week.
The DWP will issue letters to all 12.9m State Pensioners in March telling them their new payment rates. This letter also encourages older people to check if they are eligible for Pension Credit.
State Pension and tax
The Personal Allowance will remain frozen at £12,570 over the 2025/26 financial year.
The most important thing to be aware of is that people whose sole income is the State Pension will not pay income tax.
However, anyone with additional income on top of their State Pension may need to pay tax. This is paid a year in arrears, so if next year’s uplift takes you over the threshold, you will not receive a tax bill from HM Revenue and Customs (HMRC) until July 2026.