The state pension triple lock is facing renewed scrutiny after the latest figures put the full new state pension on course to exceed the personal tax allowance for the first time from April 2027.

Latest Office for National Statistics (ONS) figures showed total pay increased by 3.9 per cent between May-July 2025 and May-July 2026, meaning average earnings growth is currently on track to determine next April’s state pension increase under the triple lock.

The figure remains provisional and could be revised next month, while the final increase will also depend on September’s inflation figure.

However, with inflation standing at 2.9 per cent in July, earnings growth is currently the highest of the triple lock’s three measures.

If earnings growth remains at 3.9 per cent, the full new state pension would rise from £241.30 a week to around £250.70, an increase of roughly £9.40 a week and just under £500 a year.

LCP calculated that, for tax purposes, one week would be paid at the current rate and 51 weeks at the higher rate, producing annual state pension income of around £13,027.

This would take the full new state pension above the £12,570 personal allowance, potentially leaving somebody wholly reliant on it facing an income tax bill of around £91.40.

The government has stated that a narrowly defined group of pensioners wholly dependent on the new state pension, or the old basic state pension without increments, would not have to pay tax.

However, details of how the exemption would work have yet to be published, and LCP estimated that just one in 16 pensioners could benefit based on the policy outlined so far.

LCP partner, Steve Webb, commented: “Those on the new state pension can expect to see an increase of nearly £500 per year next April. But the sting in the tail is that this will take the standard rate of the new state pension above the tax threshold.

“The government’s plans to address this point are a mess and likely to benefit only a small fraction of pensioners.”

He also warned that the proposed exemption could create unfairness between different groups of pensioners, as well as between pensioners and lower-paid workers who would not qualify for the same treatment.

Indeed, those receiving the old basic state pension could see their weekly payment rise from £184.90 to around £192.10 under a 3.9 per cent increase, equivalent to approximately £374 a year, alongside any inflation-linked increase in additional state pension entitlements.

The prospective rise is also slightly higher than the 3.7 per cent state pension increase assumed by the Office for Budget Responsibility in its March Economic and Fiscal Outlook.

PensionBee VP personal finance, Maike Currie, said an inflation-beating increase would provide welcome support for pensioners but highlighted the growing tension between the triple lock and frozen tax thresholds.

“There is an increasingly obvious contradiction at the heart of the system: the triple lock is pushing the state pension up while frozen tax thresholds are pulling more pensioners into the tax net.

“So we increasingly have one arm of the government raising pensioners’ incomes while another claws some of that increase back through tax.”

Meanwhile, Broadstone head of policy, David Brooks, noted that the latest figures would intensify questions about the long-term affordability of the triple lock, given pressure on public finances.

“The full new state pension now exceeds the personal allowance, a landmark that will inevitably draw further attention to the impact of frozen tax thresholds and the substantial increases we have seen in the state pension over recent years,” he warned.

Brooks stressed that protecting pensioners' living standards remained important, but argued that the system also needed to remain fair and financially sustainable between generations.

“Transitioning to a double lock that protects increases in line with working-age benefits would seem the most likely compromise, given it is today’s workers who ultimately fund the state pension,” he added.

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