State Pension Boost Confirmed in Chancellor's Budget
Chancellor Rachel Reeves has officially announced the exact amount the state pension will increase by next year, delivering a significant financial uplift for millions of retirees across the UK. The state pension is set to rise by 4.8% from April 2026, a move that will provide a substantial boost to household incomes for older Britons.
How Much Extra Will Pensioners Receive?
This increase translates to nearly £575 extra per year for those receiving the full new state pension. In her Autumn Budget statement, the Chancellor confirmed this means an increase of £575 per year for the new state pension and £440 per year for the basic state pension.
The full new state pension will see its weekly rate jump from £230.25 to £241.30. Over the course of a year, this marks a rise from £11,973 to £12,547.60.
For those on the older basic state pension, the weekly amount will increase from £176.45 to £184.90, taking the annual figure to £9,615.
The Triple Lock Mechanism and Tax Implications
This annual increase is governed by the triple lock guarantee, which ensures the state pension rises by the highest of three figures: earnings growth from May to July, inflation from the previous September, or 2.5%. The 4.8% rise for 2026 is based on wage growth recorded between May and July, which was the highest of the three measures.
However, this welcome increase brings a potential complication for many pensioners. The new full state pension of £12,547.60 is now just below the personal tax allowance, which is frozen at £12,570. This means millions of pensioners are being edged closer towards paying income tax for the first time.
In a significant announcement, the Chancellor revealed that individuals who are "only in receipt of the basic or new state pension" will not have to "pay small amounts of tax through Simple Assessment". Further details on how this will be implemented are still awaited.
It is important to note that these are the maximum state pension amounts. The actual sum an individual receives depends on their National Insurance record. To qualify for the full new state pension, most people need 35 qualifying years of National Insurance contributions.
The state pension age is currently 66 for both men and women, with plans to gradually increase it to 67 between 2026 and 2028.
