The state pension could increase by more than £550 next year under the triple lock, analysis from Broadstone has suggested, as average earnings growth, including bonuses, is currently running at 4.6 per cent, with increases expected to outpace inflation. 

The analysis showed that, if this rate were maintained in September, the new state pension would rise annually by £551, taking it to around £12,524 a year from £11,973. 

If earnings growth falls dramatically in the next month, then the next determinant for an uprate will be the inflation figure. 

If September’s inflation figure matches the Bank of England’s projection of 4 per cent, the state pension would increase by around £480 from April 2026 – lifting it to £12,452 per year.

The analysis was shared hot on the heels of the launch of the state pension age review, which will share recommendations for future arrangements in light of long-term
demographic pressures and questions around the sustainability of the current state pension.

And there has been growing concern that the triple lock could be a target for any changes, with a report from the International Monetary Fund warning that the government will need to make "difficult decisions" to rebuild fiscal buffers given the UK's ageing population.

Indeed, Broadstone head of policy, David Brooks, warned that whilst news of a state pension increase will be good news for pensioners in light of ongoing cost-of-living pressures, the bad news is that the rising costs of the benefit risks creating growing tension between
today’s taxpayers who fund the system and current pensioners who rely on it.

"The government and Pensions Commission will be under pressure to confront this challenge as part of the independent state pension age review, he continued.

“It seems inevitable that, while the state pension will and should remain a bedrock of
retirement provision, calls to introduce means-testing will grow louder.

"These should be resisted, but what remains on the table is the possibility of the cost being met by wealthier pensioners via the introduction of a national insurance contribution of some kind or a winding down of the triple lock."

“Ultimately, the cost of the state pension is a political decision. The persistence of the triple
lock has created a steady rise in costs without clear long-term policy direction. As the
retired population grows and depends increasingly on today’s workers to fund the system,
some form of change is unavoidable.”

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