Prices keep nudging wallets, while pay and pensions jostle with tax. Another change looms that could shift monthly budgets.
From April 2026, the state pension is set to rise by 4.7% under the triple lock, adding about £562 to the full annual amount. The move follows stronger wage growth, which has outpaced inflation and the 2.5% floor that underpin the policy.
What is changing from April 2026
The full new state pension is expected to increase to roughly £241 a week, or about £12,535 a year. That means an annual uplift near £562 for those entitled to the full rate. Payments should reflect the change from April 2026, with the first higher instalment hitting accounts according to each claimant’s normal payday.
The full new state pension is forecast to reach approximately £241 a week in 2026/27, adding around £562 a year.
People on the basic (pre-2016) state pension will also see a 4.7% rise, though their headline figure differs because that legacy system operates on older rules and may include additional state pension built up over time.
Who will receive the full amount
The full new state pension goes to those with 35 qualifying years of National Insurance contributions or credits and no relevant deductions. A shorter record usually means a proportionate amount. Gaps can exist for carers, self‑employed workers, and anyone who spent time out of the workforce. Deferring can increase your weekly rate, although that choice suits only some circumstances.
Triple lock: how the 4.7% uplift was set
The triple lock raises the state pension each April by the highest of three measures: inflation, average earnings growth, or 2.5%. This time, wage growth around 4.7% leads, so pension payments follow that figure in 2026/27.
The triple lock picks the highest of inflation, earnings growth or 2.5% to set the next April’s rise.
Critics argue repeated uplifts put pressure on the public purse, while supporters call it essential protection for retirees’ living standards. Ministers have promised to keep the triple lock in place until the end of the current Parliament. What happens after remains unclear.
The tax question: will frozen bands eat the rise
The headline gain looks welcome, but tax rules complicate the picture. With income tax thresholds currently frozen, the new state pension will sit just under the personal allowance. That narrows the gap and pulls more people into paying tax for the first time.
On current settings, the full new state pension of about £12,535 will sit only a whisker below the £12,570 personal allowance. Anyone with more than £35 of additional taxable income in the year could face basic‑rate tax on the excess. That includes workplace or private pensions, some rental income, and some savings income above allowances.
Fiscal drag means some pensioners will pay tax for the first time as the state pension edges up toward the personal allowance.
How HMRC collects the tax
State pension is paid to you gross and untaxed. HMRC usually adjusts your tax code on other income, such as a workplace or private pension, to collect tax due on your state pension. If you do not have other PAYE income, you may need to settle any tax via Self Assessment or a direct bill.
What this means for you in numbers
| Uplift for 2026/27 | 4.7% |
| Full new state pension (year) | ~£12,535 |
| Full new state pension (week) | ~£241 |
| Annual increase | ~£562 |
Figures rounded. Your actual entitlement depends on your National Insurance record and any deductions.
Worked examples
Example 1: state pension only
A claimant on the full new rate receives about £12,535 a year. This remains just under the personal allowance, so no income tax is due on the state pension alone.
Example 2: state pension plus a small private pension
Someone receives the full new state pension plus £1,000 a year from a small workplace pension. Taxable income above the personal allowance would be roughly £965. At 20%, that is about £193 of tax across the year, usually collected through the workplace pension’s tax code.
Example 3: partial National Insurance record
A person with 25 qualifying years gets a proportionate state pension. They may still stay below the tax threshold even with a modest private pension, but they gain less than someone with 35 years.
Steps to keep more of your money
- Check your tax code to ensure HMRC collects the right amount and you are not overpaying.
- Review whether Marriage Allowance could help if one partner’s income stays below the personal allowance.
- Hold savings in an ISA to avoid taxable interest that could tip you over the threshold.
- Consider timing withdrawals from a personal pension to manage what falls into each tax year.
- Confirm your National Insurance record and look at whether voluntary contributions make sense for you.
- Deferring the state pension can increase your weekly rate, but weigh the break‑even age and your health.
Pension Credit and wider support
Low‑income retirees may qualify for Pension Credit, a means‑tested top‑up that can open the door to other support, such as help with housing or energy bills. Many eligible households miss out each year. If you have limited income besides the state pension, check whether you qualify. A successful claim can boost weekly income and provide valuable knock‑on entitlements.
Key dates and practicalities
The higher rate applies from April 2026. Your first increased payment depends on your regular payday. Most state pension payments arrive every four weeks. The day of the week typically follows the last two digits of your National Insurance number, spread Monday to Friday. If you recently reached pension age, expect your first instalment after DWP has processed your claim.
What to watch next
Two moving parts will shape how this rise feels. First, whether tax thresholds stay frozen. Second, where inflation and earnings go over the next year. The triple lock will pick the highest of the three inputs again for April 2027, so the same trade‑off between protection and affordability will return.
If you need to plan, run a quick simulation. Add your expected 2026/27 state pension to any other taxable income. If the total tops the personal allowance, multiply the excess by 20% to estimate tax. Adjust pension withdrawals if you have the flexibility. Small changes in timing can reduce the bill.
Finally, think about gaps in your National Insurance history. Voluntary top‑ups can boost your future weekly rate, but they cost real money and pay back over time. Ask for a forecast, compare the cost with the extra income, and decide whether it suits your budget and health outlook.
With the full new state pension at ~£12,535, I’ve got a £1,200 private pension. Will HMRC adjust my PAYE code to collect the ~£193, or do I need Self Assessment? New to this, thx.
We trumpet £562, but frozen tax threshholds mean more pensioners dragged into tax. Feels like stealth taxation—triple lock with double hand‑back. Is this sustainable, or just pre‑election window‑dressing?