Older state pensioners across the UK are set to receive boosted payments of up to £768.40 every four weeks from the Department for Work and Pensions (DWP) in 2027. The payment boost is due to come from the increase to State Pension rates, which will take effect at the start of the new tax year on April 6.
Triple Lock Drives 3.9% Rise
The State Pension rises each tax year in line with the triple lock, a UK Government guarantee that rates will rise every year by the highest of three measures: the consumer price index (CPI) measure of inflation (measured for September the year before), average wage growth between May and July the previous year, or a minimum of 2.5%.
While Prime Minister Andy Burnham has announced plans to end the triple lock in 2030 to remove the link to average earnings, the system is set to remain unchanged until the end of this Parliament.
Under the current triple lock system, the State Pension is set to rise by 3.9% in April 2027 in line with average wage growth, the highest of the three measures, so it is expected this figure will be used to set rates for the 2027 to 2028 tax year.
What the Increase Means for Pensioners
This 3.9% increase would take the full old basic State Pension up from £184.90 per week to £192.10. As the State Pension is paid by the DWP every four weeks, this would give older pensioners £768.40 per payment period if they're entitled to the maximum amount, up from the current maximum of £739.60.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: "We expect next year’s State Pension increase to be formally confirmed in the Autumn Budget, but the likelihood is it will rise in line with average earnings for May-July which is 3.9%.
"Such an increase would put someone on the full new state pension on course to receive £250.70 per week from next April – up from the current £241.30 per week. Someone on a full basic state pension would receive £192.10 per week – up from £184.90."
Eligibility and Payment Amounts
These figures are based on the maximum possible amount for those with a full qualifying National Insurance record, so those without enough qualifying years will receive less.
You'll get the basic State Pension if you're a man born before April 6, 1951, or a woman born before April 6, 1953, but your payment amount depends on your National Insurance record. To get the full payment, a man born between 1945 and 1951 usually requires 30 qualifying National Insurance years, while men born before 1945 require 44 qualifying years. For women, you'll need 30 qualifying years if you were born between 1950 and 1953, or 39 qualifying years if you were born before 1950.
As for younger pensioners who receive the new State Pension, a 3.9% increase would raise the weekly rate from £241.30 to £250.70. So for each DWP week payment period, those entitled to the full amount could get up to £1,002.80 every four weeks, up from £965.20 currently.
Tax Implications and Future Changes
Ed Monk, associate director at Fidelity International, explained: "The State Pension in the current 2026/27 financial year is set at £241.30 a week, or £12,548 a year, for those claiming the full new State Pension. That follows a 4.8% rise from the year before based on the increase in wages, which was the highest of the three measures.
"And we now know the rise that will apply in the 2027-28 tax year. In April 2027 the State Pension will rise to £250.70 a week - £13,036.40 a year - following a 3.9% rise in wages that was confirmed in labour market data published this month.
"Consider that as recently as the 2022/23 tax year it was just £185.15 a week - meaning that by next year it will have risen by more than 35% in five years."
As the personal tax allowance has been frozen at £12,570 since 2021, it means state pensioners will be caught within the tax net for the first time. So far, the Government has said pensioners who are wholly dependent on the new State Pension – with no private pension – or the old basic State Pension, "with no increments", will not have to pay tax.
It's still unclear exactly how the policy will work, but the Government is expected to set out further details in the Budget on October 28.
In his first Labour conference speech as party leader and Prime Minister, Mr Burnham said he will honour the manifesto promise to keep the triple lock unchanged throughout this Parliament, but from April 2030 this will be adjusted. From this point, he has proposed that the State Pension will continue to rise every year at least by prices or 2.5% - removing the link to average earnings - with the savings generated from this change to be used to "build up our National Care Service".
Mr Burnham said the State Pension "will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation".
