The Office for National Statistics (ONS) will publish the Consumer Price Index (CPI) inflation rate for September on Wednesday, October 21, completing the three measures used to determine the annual State Pension Triple Lock uprating. The announcement could reveal how much more than 13 million people of State Pension age across the UK, including 1.1 million in Scotland, will receive from next April.
Earnings Growth on Track to Set Increase
The latest earnings growth figure of 3.9 per cent is currently on track to be the multiplier for the 2027/28 financial year, which could see people on the full New State Pension receive almost £490 more over the year. However, the final increase will depend on whether September's CPI inflation figure is higher than earnings growth.
The latest CPI inflation rate for August was 3.1 per cent, suggesting the earnings growth measure is likely to determine the annual uprating. Under the Triple Lock, the New and Basic State Pensions increase each April in line with whichever is highest of average annual earnings growth from May to July, CPI inflation in the year to September, or 2.5 per cent.
Payment Rates and Confirmation
If earnings growth remains the highest measure, the full New State Pension would increase from £241.30 to around £250.70 per week, while the full Basic State Pension would rise from £184.90 to around £192.10. This would take the full New State Pension above £13,000 a year for the first time.
The new payment rates are expected to be formally confirmed by Chancellor John Healey at the Autumn Budget on October 28. The Labour Government has committed to maintaining the existing Triple Lock throughout this Parliament, with changes to the uprating mechanism due to take effect from April 2030.
Additional Payments and Tax Considerations
The September CPI figure will also determine the annual increase for Additional State Pension elements, including SERPS and State Second Pension, along with certain deferred State Pension increases. Unlike the main New and Basic State Pension rates, these payments are uprated in line with September CPI inflation rather than the highest of the three Triple Lock measures.
The Personal Allowance is currently frozen until April 2031, meaning people with additional taxable income from workplace pensions, private pensions, employment or savings could face higher Income Tax bills. However, the Labour Government has said pensioners whose sole income is the New State Pension will not have to pay Income Tax on those payments.
Guidance on GOV.UK advises that Income Tax may be payable if someone's total annual income exceeds their Personal Allowance. This can include State Pension payments, workplace or private pensions, earnings from employment, taxable benefits and income from savings or investments. People can check whether they may need to pay Income Tax on their pension using the free online tool on GOV.UK.
The ONS will publish September's inflation figures at 7am on Wednesday, October 21, with the new State Pension payment rates expected to be confirmed at the Autumn Budget the following week on October 28.
