Millions of pensioners across Britain are set to receive a significant boost to their income next year as the state pension increases by more than £550 annually under the government's triple lock guarantee.
How the Triple Lock Delivers Pension Increases
The Department for Work and Pensions has confirmed that the state pension will rise substantially from April 2025, with the increase driven by the triple lock mechanism. This policy ensures pensions grow by the highest of three figures: inflation, average wage growth, or 2.5%.
This year, wage growth emerged as the highest figure at 4.8%, determining the rate of increase. According to Treasury calculations, this represents a £120 greater increase than if pensions had simply tracked inflation.
Specific Payment Increases Revealed
The new state pension will see an annual rise of £574.60, while the basic state pension will increase by £439.40. This means recipients of the new state pension will receive approximately £12,547 per year, just £23 below the current income tax threshold of £12,570.
The old basic state pension will increase from £9,175 to £9,614 annually. These changes take effect from Thursday 27 November 2025.
Tax Implications for Pensioners
Pension consultants LCP have highlighted that this increase brings state pension recipients perilously close to the income tax threshold. Steve Webb, partner at LCP, warned: "This will keep the headline rate of the state pension below the income tax threshold for one more year, but it will go above the tax threshold in 2027 if allowances do not rise."
The narrowing gap between pension values and the tax-free personal allowance means that many pensioners could find themselves paying income tax on their state pension for the first time if thresholds remain frozen while pensions continue to increase under the triple lock system.
