The state pension is likely to rise by £9.40 a week to £250.70 next April, according to the latest jobs and pay data.
Under the triple lock pension guarantee, the increase is based on either average wage growth, inflation or 2.5% – whichever is highest.
Average wage growth, including bonuses, between May and July slowed to 3.9%, according to the Office for National Statistics.
Almost 13 million people receive the state pension in the UK and current projections suggest pensioners will pay income tax on it from 2027 for the first time.
If it does rise by 3.9%, it would take the flat-rate state pension above the personal allowance of £12,570 and so liable for income tax.
The Labour government has previously pledged that pensioners who rely solely on the state pension would not be required to complete a tax return, nor be chased to pay.
The average wages figure published by the ONS is likely to be the defining factor in the rise in the state pension next April.
It is likely to mean:
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the flat-rate state pension – for those who reached state pension age after April 2016 – will likely be £250.70 a week, or £13,036.40 a year, up £488 on now
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the old basic state pension – for those who reached state pension age before April 2016 – will likely be £192.10 a week, or £9,989.20 a year, up £374.40 on now
The increase to next year’s state pension will not be confirmed until September inflation is released next month.
If it is higher than 3.9%, that figure will be used to calculate the increase.
The wages figure may also be revised in a month’s time.
Inflation is currently 2.9% and is expected to rise in the coming months.
