State pension could hit £13,000 next April, but the £488 increase comes with a tax catch
State Pension could rise by £488 next April. Credit: Getty Images
Millions of UK pensioners are on course for another significant State Pension increase next April, with the latest earnings figures pointing to a 3.9% rise from April 2027.
The forecast would lift the full new State Pension from its current rate of £241.30 a week to around £250.70 a week, adding roughly £9.40 to weekly payments. Over a full year, that would take the annual amount to approximately £13,036.40, an increase of about £488.
The figure is not yet final. The annual State Pension increase is determined under the government’s triple lock, and September’s inflation figure will be needed before the 2027 uprating can be confirmed.
The latest Office for National Statistics figures show average total pay, including bonuses, increased by 3.9% between May and July 2026. That is currently higher than the 2.9% inflation rate recorded in July, making earnings growth the leading candidate for next year’s pension increase.
April 2027 State Pension rise forecast
The triple lock guarantees that the State Pension rises each year by whichever is highest among average earnings growth, inflation or 2.5%.
The latest earnings figure means the working forecast for April 2027 is now 3.9%.
For someone receiving the full new State Pension, the calculation would produce:
- Current full new State Pension: £241.30 a week
- Forecast increase: 3.9%
- Estimated April 2027 payment: £250.70 a week
- Estimated annual payment: £13,036.40
- Estimated annual increase: about £488
The Government Actuary confirms that the triple lock is calculated using annual growth in average May-to-July earnings, September CPI inflation and the 2.5% minimum, with whichever measure is highest determining the increase.
That means the 3.9% figure is a forecast rather than an official final rate.
Old State Pension could also increase
People who reached State Pension age before the new State Pension was introduced in April 2016 are generally covered by the old basic State Pension system.
For them, the projected 3.9% increase would take the full basic State Pension from £184.90 a week to about £192.10.
That would put the annual amount at roughly £9,989.20, an increase of approximately £374.40 a year.
The actual amount an individual receives can differ depending on their National Insurance record and whether they receive additional or protected pension payments.
The current full new State Pension is £241.30 a week, while the full basic State Pension is £184.90 following the April 2026 uprating.
Why the April pension rise is not confirmed yet
The latest wage figures provide the first major indication of next year’s increase, but pensioners will have to wait for the September inflation figure before the government can formally determine the triple-lock rate.
Inflation would have to rise significantly above the current wage-growth figure for prices to replace earnings as the measure used for the April 2027 increase.
The triple lock is deliberately designed to use whichever of the three measures produces the largest increase. If September CPI remains below 3.9%, the earnings figure will determine the rise. If CPI unexpectedly exceeds 3.9%, inflation would become the relevant measure instead.
The minimum 2.5% guarantee is currently well below both the earnings and inflation figures, so it is unlikely to determine the April 2027 increase under current conditions.
READ ALSO
State pension triple lock could cost Billions more: Why calls to scrap it are growing
State Pension could move above the personal tax allowance
One of the biggest consequences of the projected increase is the possibility that the full new State Pension will move further above the £12,570 personal allowance.
At an annual rate of around £13,036.40, someone receiving the full new State Pension would have income above that threshold.
That does not mean every pensioner receiving the State Pension will suddenly receive a tax bill. Individual tax liability depends on total taxable income, allowances and personal circumstances.
The issue is nevertheless becoming more important because the State Pension has been rising while the personal allowance has remained frozen.
For pensioners with no other taxable income, the government has previously said those relying solely on their State Pension would not be expected to complete a tax return simply because the pension exceeds the personal allowance.
Triple lock comes under renewed pressure
The expected increase arrives as the long-term cost of the triple lock continues to attract political and economic scrutiny.
The policy has helped protect pension incomes against periods of high inflation and weak wage growth, but critics argue that repeatedly choosing the highest of three measures can cause pension incomes to grow faster than earnings over time.
The Institute for Fiscal Studies has warned that the triple lock has increased the value of the State Pension but also creates high and uncertain future costs for the government.
The Resolution Foundation has similarly raised concerns about what it describes as a “ratchet effect”, arguing that pensioner living standards can rise faster than those of typical workers when the highest measure is repeatedly applied.
That debate is likely to intensify if the April 2027 increase is confirmed at 3.9%.
The government has committed to maintaining the triple lock during the current Parliament, meaning pensioners are currently entitled to expect the mechanism to remain in place for the 2027 increase.
What the 3.9% pension rise means for pensioners
For someone receiving the full new State Pension, the projected increase works out at around £9.40 more each week.
Across 12 months, that is close to £488 in additional State Pension income.
The increase could provide some relief for pensioners facing higher household costs, particularly those who rely heavily on the State Pension.
But the headline figure does not tell the whole story. Pensioners with private pensions, savings or other taxable income could face different outcomes because of the interaction between the State Pension, tax thresholds and other income.
The increase in the State Pension also does not automatically mean that pensioners will be £488 better off in real terms. That depends on how prices change over the same period.
When will the April 2027 State Pension increase be confirmed?
The final rate should become clear after the September inflation data is released.
If September CPI remains below the 3.9% earnings figure, the earnings measure is expected to determine the increase.
The government will then formally announce the rates that will apply from April 2027.
Until that process is complete, the £250.70 weekly figure should be treated as a forecast rather than a confirmed payment rate.
Frequently Asked Questions
How much will the State Pension rise in April 2027?
The current forecast is for a 3.9% increase in April 2027, which would add around £9.40 a week to the full new State Pension.
What will the State Pension be in April 2027?
If the 3.9% forecast is confirmed, the full new State Pension would rise to approximately £250.70 a week, or £13,036.40 a year.
How much extra will pensioners get from the April 2027 rise?
Someone receiving the full new State Pension could receive about £488 more per year, based on the current 3.9% forecast.
Is the 3.9% State Pension increase confirmed?
No. The 3.9% figure is currently a forecast based on the latest earnings data. September’s CPI inflation figure must be published before the final triple-lock calculation can be established.
What is the State Pension triple lock?
The triple lock means the State Pension rises each year by whichever is highest: average earnings growth, inflation or 2.5%.
Will the full State Pension go above £13,000?
Yes, if the 3.9% forecast is confirmed. The full new State Pension would reach approximately £13,036.40 a year.
Will pensioners have to pay tax on the State Pension?
The State Pension is taxable income, but whether someone actually pays tax depends on their total taxable income and available allowances. The projected full new State Pension would be above the current £12,570 personal allowance.
What happens if inflation is higher than 3.9%?
If the relevant September CPI figure is higher than the 3.9% earnings figure, inflation would determine the triple-lock increase instead. The highest of earnings, inflation and 2.5% is used.
When will the 2027 State Pension increase start?
The new State Pension rates are expected to take effect from April 2027, following the government’s formal uprating process.
How much is the full State Pension now?
From April 2026, the full new State Pension is £241.30 a week, while the full basic State Pension is £184.90 a week.