New state pensioners will receive a confirmed £490 annual cash boost from April, following an announcement by the Secretary of State for Pensions.
The increase, delivered through the triple lock mechanism, will apply to those who reached state pension age in or after April 2016, meaning they would now not be older than 76. The triple lock raises pensions by the highest of inflation, wage growth, or a flat 2.5%.
Triple lock delivers 3.9% rise
In a statutory review for Parliament following the Autumn Budget, Pat McFadden confirmed that the basic and full rates of the new state pension will rise by 3.9%, in line with the increase in average weekly earnings in the year to May-July 2026.
McFadden wrote: "I am pleased to announce that the basic and full rate of the new state pensions will be increased by 3.9%, in line with the increase in average weekly earnings in the year to May-July 2026."
He added: "This delivers on our triple lock commitment throughout this Parliament to increase these rates in line with the highest of growth in prices, growth in earnings or 2.5%. From April, the full annual rate of the new state pension will increase by around £490. The full annual rate of the basic state pension will increase by around £375."
Older pensioners see lower boost
Older state pensioners have also been given the same triple lock, but because their basic payments are lower, the cash boost is not as high. The figures represent the maximum increase for a pensioner with a full National Insurance record.
New Pensions Tax Allowance detailed
Chancellor John Healey has also announced details of the new Pensions Tax Allowance, a policy first introduced by Rachel Reeves. Under the plan, state pensioners receiving the full new state pension will not pay tax on it, despite the amount reaching £13,036 per year, which exceeds the £12,570 Personal Allowance threshold. Any income below £13,036, including the pension, savings, property income, and salary, will be tax free.
