Swathes of pensioners could receive a £551 boost to their pensions next year under the triple lock. Many retirees’ annual payments are expected to climb from £11,973 to £12,524 from April 2026, according to calculations from consultancy Broadstone.
However, only some pensioners are expected to receive it. Only those on the headline full, new state pension introduced from April 2016 could receive the boost. This is because their whole pension is tied to triple lock, which guarantees payments will rise by inflation, earnings growth, or 2.5%—whichever is highest—and next year’s looks like it could be based on annual earnings growth. Final figures have not been released yet, but from April to June, average earnings grew at 4.6%, which outpaced latest inflation figures of 3.8%.
If this rate of wage growth were maintained, eligible pensioners could see a boost of as much as £551 to their annual payments. This would mean weekly payments would climb from £230.25 to £240.84.
Official wage growth figures for May to July will be released in mid-September, and September’s inflation figure will be revealed in October.
Pensioners must have made sufficient National Insurance contributions during their working lives, or 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.
However, millions of pensioners who reached state pension age before April 2016 may not receive the expected £551 triple-lock boost to their payments next April.
That’s because the basic state pension and potential Serps top-ups, do not increase at the same rate.
Sir Steve Webb, a former pensions minister, told The Telegraph: “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.”
The basic state pension, which is currently £176.45 a week or £9175.40 a year, will rise according to the triple lock, which could mean a hike of £422 for those on the maximum basic rate.
However, inflation which is linked to Serps or S2P, currently looks lower than wage growth. Last April, Serps rose according to inflation at 1.7%, but triple lock was 4.1% because it was set in line with the rise in earnings.
