Under the Triple Lock program, around 9.7 million pensioners receiving the Basic State Pension could see their weekly benefits increase by up to £40 per month.
If the Conservatives and Labour Party win the General Election on July 4, they will both commit to keep the Triple Lock in place for the duration of the next parliament.
Key Insights on Basic State Pension Uprating and Future Projections
Under the Triple Lock, the New and Basic State Pensions increase in April in accordance with the higher of the average annual wage growth from May to July, the Consumer Price Index (CPI) in the year to September, or 2.5 percent.
According to the latest figures from the Office for National Statistics (ONS), the CPI inflation rate fell from 2.3% in April to 2.0% in May.
At the moment, this makes it the lowest metric of the Triple Lock, whereas earnings growth is the strongest - and the one worth keeping an eye on. Regular earnings (excluding bonuses) increased by 6.0 percent each year from February to April 2024, while employees' annual average total earnings (including bonuses) increased by 5.9 percent.
If the earnings growth indicator for May to July, which is scheduled to be reported by the ONS on August 13, stays at 5.9 percent (including bonuses), it will almost probably be the deciding factor for the State Pension increase in April 2025.
The entire Basic State Pension is currently valued £169.50 each week, or £678 per four-week pay period. An yearly uprating of 5.9% would see benefits rise to £179.65 each week, £718.60 per four-week pay period, or £9,341.80 throughout the 2025/26 financial year.
Similarly, 2.6 million pensioners are now receiving New State Pension payments of up to £221.20 each week, or £884.80 per four-week pay period.
An uprating of 5.9% would see people on the full New State Pension earn £234.45 every week, £937.80 per four-week pay period, or £12,191.40 throughout the fiscal year 2025/26.
Keep in mind that these figures are estimated calculations based on current data. It's also worth noting that additional State Pension payments and deferred State Pensions grow annually under the September CPI. The UK government normally confirms the annual increase during the Autumn Statement in November.
Steven Cameron, Aegon's Pensions Director, commented on the recent CPI inflation figure, saying: “Last week, the launch of the Conservative and Labour manifestos finally made an official commitment to maintain the State Pension Triple Lock for the next five years. As a result, State Pensioners can have peace of mind knowing that their State Pension will continue to increase at the highest of price inflation, earnings growth or 2.5%.
“The Conservatives went a stage further, committing to their new ‘Triple Lock Plus’, under which the Personal Allowance for State Pensioners would also increase in line with the Triple Lock. This removes any possibility of State Pensioners in receipt of the full New State Pension paying income tax on this.”
New State Pension payment rates 2024/25
- Full payment rate: £221.20
- Every four-week pay period: £884.80
Basic State Pension payment rates 2024/25
- Category A or B Basic State Pension (full rate): £169.50
- Every four-week pay period: £678.00
- Category B (lower) Basic State Pension - spouse or civil partner's insurance: £101.55
- Category C or D - non-contributory: £101.55