State pension could rise to £935 a month as experts make triple lock prediction

Experts have predicted how much state pension payments could rise next year.

In April this year, 12 million pensioners received an 8.5 per cent rise in their state pension payments. Meanwhile people claiming DWP benefits received a 6.7 per cent rise, matching inflation.

Payment increases for the state pension are higher than others thanks to a rule called the triple lock. Under the measure, state pensions increase each year in line with whichever is the highest out of: average annual earnings growth from May to July, CPI inflation in the year to September, or 2.5 per cent.

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In April this year, the new and basic state pensions increased by 8.5 per cent, which means someone on the full New State Pension now receives £221.20, or £884.80 every four-week pay period during the 2024/25 financial year. Those on the full Basic State Pension now receive £169.50 each week, or £678 every four-week pay period, reports the Daily Record.

This week it was announced that the Consumer Prices Index (CPI) inflation slowed to 2.3 per cent in April, down from 3.2 per cent in March - the lowest level since July 2021 when inflation was recorded at 2 per cent, which is the Bank of England's target level.

Pensioners will likely be paying close attention to the inflation rate over the next few months, as it could determine how much payments will rise by. However, Steven Cameron, Pensions Director at Aegon, has explained that the triple lock could push payments up by as much as 5.7 per cent next April.

He said: “For the April 2024 increase, earnings growth in 2023 produced an inflation-busting 8.5 per cent increase. In April 2023, a spike in inflation the previous year led to a record-breaking 10.1 per cent boost to the State Pension. These increases and the underlying high volatility that was present in both price inflation and earnings growth, have since raised serious questions over longer term affordability of the State Pension, which is paid for by today’s workers through National Insurance Contributions.

“With inflation having now fallen below the 2.5 per cent underpin, it’s likely to be earnings growth that determines next year’s triple lock increase, as the latest figures have this sitting at 5.7 per cent (for January to March 2024).

“The specific figure used for determining the triple lock will be the year-on-year increase in earnings for the period ending May to July 2024, which will be published in September. Barring a significant drop in earnings growth over the next few months, this figure will likely determine next year’s triple lock.”

State Pension uprating predictions for 2025/26

As Steven highlighted, the triple lock looks on track to be determined by the earnings growth element which is currently at 5.7 per cent. However, this figure may go up or down and isn't the final metric that will determine the level of uprating.

That being said, a 5.7 per cent increase on the current State Pension would see people receive:

• Full New State Pension - £233.80 each week, £935.20 every 4-week pay period, £12,157.60 over the 2025/26 financial year

• Full Basic State Pension - £178.40 each week, £713.60 every 4-week pay period, £9,276.80 over the 2025/26 financial year

Steven continued: “If price inflation stays low and earnings growth also gradually falls back to levels more typical of the last decade, then the State Pension triple lock formula may produce more predictable and affordable increases.

"This will make it less costly for the next Government to commit to maintain it for a further 5 years. We may see lower rates of increases, but in times of lower inflation, the State Pension doesn’t need to increase by as much to allow pensioners to maintain living standards.

“However, rather than a three-way comparison year on year, we’d recommend averaging the earnings component over a three-year period, which could smooth out excessive volatility and help ensure intergenerational fairness.”