Overview

• The triple lock will lift next April’s state pension by the highest of September’s inflation, average earnings growth or 2.5%, with a near 4% inflation forecast triggering a £478 annual increase for new pensioners.
• The Bank of England’s projection of 4% inflation and the OBR’s 4.6% wage growth estimate would push the full new state pension to about £12,451 per year.
• Maintaining the anticipated uprating carries a £2.1 billion price tag next year and contributes to a looming £50 billion fiscal gap ahead of the autumn budget.
• A personal allowance frozen at £12,570 since 2021 means rising pension incomes could drag more retirees into the income tax net within two years.
• Analysts warn the autumn budget must address unsustainable pension spending by reforming uprating rules, raising tax thresholds or reviewing the state pension age.