The state pension is set to rise by 4.1% in April 2025 – more than double the September inflation rate of 1.7% announced today (16 October).
The rise, which is subject to official confirmation, is due to the triple lock formula.
Under this, pensions increase each April by the highest of three measures – earnings growth (the year-on-year rise in average earnings for the period May to July), price inflation for the year to September (which was announced this morning as 1.7%) or 2.5%.
As the average earnings growth – which was recalculated as 4.1% rather than 4% – is the highest of the three.
This should mean the state pension will increase by 4.1% for 2025/26.
Aegon pensions director Steven Cameron said: “For someone on the full new state pension of £221.20 a week, this would equate to an increase of £9.10 to £230.30 a week, or £11,975.60 a year.
“For those who reached state pension age before 6 April 2016 and who are on the full basic state pension of £169.50, the increase could be around £6.95, bringing them to £176.45 a week – £9,175.40 a year.
“A little-known rule is that any earnings-related element of the state pension, relating to the pre-April 2016 rules, and top ups, are only increased in line with the rate of inflation and not the triple lock.
“Therefore, some may find their overall state pension increase lags behind the 4.1% figure.”
