More than 13 million retirees across the UK, including 1.1 million in Scotland, will see their State Pension payments rise by 3.9 per cent from April 12, 2027, following confirmation of the annual increase by the Department for Work and Pensions (DWP).
The increase means people receiving the full New State Pension will get £250.70 per week, up from £241.30, while those on the full Basic State Pension will receive £192.10, up from £184.90.
Confirmation and Triple Lock
Work and Pensions Secretary Pat McFadden confirmed the increase and implementation date in a written statement to Parliament shortly after the Autumn Budget on October 28. Mr McFadden said: "I have concluded my statutory annual review of State Pension and benefit rates under the Social Security Administration Act 1992. The new rates will apply in the tax year 2027-28 and will mainly come into effect from 12 April 2027."
He added: "I am pleased to announce that the Basic and full rate of the New State Pensions will be increased by 3.9 per cent, in line with the increase in average weekly earnings in the year to May-July 2026."
The annual increase is determined by the Triple Lock, which guarantees that the New and Basic State Pensions rise each April by whichever is highest of average earnings growth, Consumer Prices Index (CPI) inflation or 2.5 per cent. This year, earnings growth of 3.9 per cent was higher than September CPI inflation of 3.5 per cent, meaning it determined the increase.
New payment rates from April 2027
New State Pension payment rates from April 2027:
- Weekly: £250.70 (from £241.30)
- Four-weekly: £1,002.80 (from £965.20)
- Annual: £13,036.40 (from £12,547.60)
Basic State Pension payment rates from April 2027:
- Weekly: £192.10 (from £184.90)
- Four-weekly: £768.40 (from £739.60)
- Annual: £9,989.20 (from £9,614.80)
The amount someone receives depends on their National Insurance contribution record, and not everyone qualifies for the full rate. It is important to be aware that the September CPI figure of 3.5 per cent determines the annual increase for Additional State Pension elements, including SERPS and State Second Pension, along with certain deferred State Pension increases.
Tax implications and new allowance
Patrick Thomson, head of research analysis and policy at Standard Life Centre for the Future of Retirement, welcomed the increase but highlighted the tax implications for pensioners. He said: "Confirmation in the budget documents that the State Pension will increase by 3.9 per cent next April will be welcome news for millions of pensioners, but it also means the full new State Pension will rise to £13,036.40, overtaking the frozen £12,570 Personal Allowance."
However, the UK Government has announced a new Pension Tax Allowance to prevent lower-income pensioners from being brought into paying income tax solely because of the increase. According to the official Pension Tax Allowance Explainer on GOV.UK, people with total annual income between £12,570 and £13,037 will receive the full tax allowance, worth up to £94 in the first year. The allowance will then reduce by £1 for every £3 of additional income, meaning some protection will remain available for people with total income up to £13,319.
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.
Before you can check, you will need to know: if you have a State Pension or a private pension, how much State Pension and private pension income you will get this tax year (April 6 to April 5), and the amount of any other taxable income you’ll get this tax year (for example, from employment or state benefits). You cannot use this tool if you get any foreign income, Marriage Allowance, or Blind Person’s Allowance. The full guide to tax when you get a pension can be found on GOV.UK.
