Will YOU get the full triple lock increase in your state pension next year?

Millions of pensioners will not receive the expected £551 triple-lock boost to their state pension payments next April.

Swathes of retirees are expected to receive a hike to their annual payments next year – from £11,973 to £12,524 – under the triple lock mechanism, according to calculations from consultancy Broadstone.

Weekly payments at the headline full rate could climb from £230.25 to £240.84.

But millions of pensioners won’t see this full uplift next year. That’s because many people’s state pensions are made up of different elements – not all of which are increased at the same rate.

Every year, the state pension rises by the highest of inflation, earnings growth or 2.5 per cent under a mechanism known as the triple lock.

The hike in April 2026 is set to be based on either September’s annual inflation figure or annual earnings growth from May to July.

State pension: Triple lock means the headline rate rises by the highest of inflation , earnings growth or 2.5 per cent

Neither figure has been released but right now the average earnings growth including bonuses is strong. It currently sits at 4.6 per cent (April to June), outpacing inflation which creeped up to 3.8 per cent, the latest data showed.

There’s still one month of data still to be released for wage growth and it is expected to outpace inflation.

If this rate of wage growth was maintained, many pensioners could see a boost of as much as £551 to their annual payments.

The potential surge in payments would be a welcome relief to vulnerable pensioners struggling on low incomes while facing a climb in energy bills and soaring living costs.

But not all retirees will get the same rise in their annual pension payments.

Why will some state pensions rise at a different rate?

This £551 potential rise will only be received by those on the headline full, new state pension introduced from April 2016. 

To get the full amount – as well as being the required age of 66 – you must have made sufficient National Insurance contributions during your working life, or have bought voluntary NI top-ups, or received credits from the Government for years spent caring or for other reasons.

Everyone retiring since April 2016 typically needs 35 years of contributions to get the new flat rate state pension.

You need a minimum of 10 qualifying years to receive any state pension.

People who reached state pension age before April 2016 receive a basic state pension, plus potentially hefty second state pension top-ups if they were earned during their working life.

The basic state pension, which is currently  £176.45 a week or £9175.40 a year, will also rise according to the triple lock. 

If you are on the maximum basic rate, that means a hike of £422.

However, the extra top-ups they received, called S2P or Serps and based on extra National Insurance payments they made earlier in their life, will rise line with inflation – which at the moment is looking like it will come in lower than wage growth.

Last April, this element of the state pension rose according to inflation at 1.7 per cent. while the triple lock was 4.1 per cent because it was set in line with the rise in earnings.

Some older people who earned enough in second state pension top-ups during their working years receive more than the headline new state pension rate. 

If you put off taking your state pension the extra portion you get for deferring is also raised according to inflation. Inherited elements of the state pension are linked to inflation too.

We have a full rundown of how different elements of the state pension are increased every year here, so you can check what you can expect to get if you are not on the new headline rate. 

Sir Steve Webb, a former pensions minister and now a partner at pensions consultancy Lane Clark and Peacock, told the Telegraph: ‘It often comes as a surprise to people that the different elements of their state pension can rise by different amounts each year.

“The additional state pension, often called Serps, has always been linked to inflation, whereas the old basic state pension has benefited from a more generous formula since 2011.

‘Next April, the additional state pension will simply be linked to inflation as usual, but the basic pension will rise by the higher of inflation or wages growth – and until October, we will not know for sure which will be the key number.’

Uplift could be less than expected 

If earnings growth plunges dramatically in the next month, September’s inflation figure will likely determine next year’s rise in payments.

The Bank of England predicts September’s inflation figure will be 4 per cent, which means the annual state pension would climb by almost £480 to £12,452.

The official wage growth figures for May to July will not be released until mid-September while September’s inflation figure is revealed in October.

Pensioners pulled into tax system

If wage growth is used to set the headline state pension rate, it would fall short of the £12,570 personal allowance threshold at which tax starts to be due – but only by £46.

The personal allowance threshold has been frozen since April 2021, in a stealth tax grab and will remain so until at least April, 2028, when it is set to rise in line with inflation.

But the state pension has soared in the last few years and it is now at risk of breaching the tax threshold.

Forecasts from Deutsche Bank released earlier this year showed the state pension rising by 5.5 per cent to £12,631 in April 2026, breaching the personal allowance threshold.

But newer analysis from Broadstone is more conservative in its calculations and it expects that retirees living on the state pension alone won’t be pulled into the tax system next year.

However, swathes of pensioners who have even a small income from personal or private pensions already breach the personal allowance limit and are liable to pay tax on any income over this amount.

People on the old basic state pension who earned sizeable second state pension top-ups are also on sums that are already above the tax threshold. 

Some 8.7 million people of at least state pension age or older are projected to pay income tax on retirement income in 2025-26, a rise of around 420,000 compared to last year.

It’s a hike of 1.85 million from ten years ago in 2015-16, the latest HM Revenue and Customs data shows.

David Brooks, head of policy at Broadstone, said: ‘Another significant increase to the state pension now looks inevitable given the strong growth in average earnings and rising inflation.’

‘The good news is this will provide further financial assistance to pensioners in light of ongoing cost-of-living pressures and the reliance of many retirees on the state pension as their main source of income.

‘The bad news is that the rising costs of the benefit risks creating growing tension between today’s taxpayers who fund the system and current pensioners who rely on it.

‘The Government and Pensions Commission will be under pressure to confront this challenge as part of the independent state pension age review.’

‘It seems inevitable that, while the state pension will and should remain a bedrock of retirement provision, calls to introduce means-testing will grow louder.

‘These should be resisted, but what remains on the table is the possibility of the cost being met by wealthier pensioners via the introduction of a national insurance contribution of some kind or a winding down of the triple lock.’