State Pension Expected to Rise by 3.9% in April 2027
UKPulse Money Desk
The state pension is likely to increase by 3.9% next April, driven by average earnings growth figures. This uplift could see the full new state pension exceed £13,000 annually.
- Average earnings growth between May and July was 3.9%, according to provisional ONS figures.
- The full new state pension is expected to rise from £241.30 to £250.70 per week.
- The basic state pension is set to increase from £184.90 to £192.10 per week.
Pensioners are likely to see a 3.9% increase in their state pension from April next year. This projection is based on provisional figures published today by the Office for National Statistics (ONS), which show average earnings growth between May and July was 3.9%.
Under the triple lock mechanism, the state pension rises each April by the highest of September's Consumer Prices Index (CPI) inflation, 2.5%, or average earnings growth from the previous May to July. Unless September 2026 CPI inflation significantly exceeds July's 2.9%, the 3.9% earnings growth figure is expected to determine the increase.
The full new state pension, currently around £12,547 per year, is likely to increase to approximately £13,036 annually. The basic state pension is also set to rise from about £9,614 to £9,989 per year.
The 3.9% uplift is expected to be confirmed by Chancellor John Healey in next month’s Autumn Budget. While the latest wage figures are initial estimates and subject to minor revisions in October, the increase is considered very likely.
Why this matters: The projected increase could lead to the full new state pension exceeding the personal allowance for the first time, potentially bringing more pensioners into the income tax bracket.
What this means for you: If your sole income is the full new state pension, you may be pulled into the basic rate tax band from April 2027 as the state pension is set to breach the £12,570 personal allowance. For those with other retirement incomes, a considered approach to tax and retirement planning, including using tax-free accounts like ISAs, may help manage potential income tax bills.