Latest World Breaking News Online News Portal
The UK Government has vowed to uphold the Triple Lock, assuring that it will ensure “older people are able to live with the dignity and respect they deserve” throughout their golden years.
Yet, despite this commitment, the Personal Allowance is set to remain at £12,570 until the 2028/29 financial year. This standstill could see over four million pensioners—those solely reliant on the New State Pension—exceed the income threshold in just two years’ time.
The Triple Lock promises yearly uplifts in the New and Basic State Pensions by whichever is highest out of three measures: the average wage increase from May to July, CPI in the year to September, or 2.5%. Its purpose is to protect State Pensions from being diminished by the cost of living.
With this week’s uprating, both the New and Basic State Pensions will rise by 4.1%, but projections from the Labour Government suggest a modest 2.5% increase for the next four fiscal years. These predictions indicate that the full New State Pension will hit £12,578.80 in the 2027/28 financial year—just over the Personal Allowance limit by £78.80.
While the taxable amount of the State Pension may seem insignificant, pensioners with additional income sources could face a larger tax bill. This situation is further complicated if this tax isn’t automatically deducted from their private or workplace pensions through PAYE, reports the Daily Record.
The Labour Government plans to uphold the Triple Lock throughout its term, with the following annual increases:.
- 2025/26 – 4.1% confirmed, the forecast was 4%
- 2026/27 – 2.5%
- 2027/28 – 2.5%
- 2028/29 – 2.5%
- 2029/30 – 2.5%
State Pension amounts for the 2025/26 financial year
Full New State Pension
- Weekly payment: £230.25 (from £221.20)
- Four-weekly payment: £921 (from £884.80)
- Annual amount: £11,973 (from £11,502)
Full Basic State Pension
- Weekly payment: £176.45 (from £169.50)
- Four-weekly payment: £705.80 (from £678)
- Annual amount: £9,175 (from £8,814)
Future new State Pension forecasts
Under a 2.5 per cent increase, the full New State Pension will be worth:
- 2026/27 – £236 per week, £12,227.30 a year
- 2027/28 – £241.90 per week, £12,578.80 a year
The full New State Pension is set to see a significant increase in the coming years, with projections for 2026/27 at £236 per week, amounting to £12,227.30 annually, and for 2027/28 at £241.90 per week, totalling £12,578.80 a year. If there’s a 2.5 per cent enhancement, the pension could stand even higher.
Conservative MP Gareth Davies sought clarity from the Treasury regarding future predictions for the State Pension value, Income tax personal allowance thresholds, and whether the State Pension might exceed the £12,570 threshold.
In response, Treasury official James Murray provided a written statement which said: “The Government is committed to ensuring that older people are able to live with the dignity and respect they deserve, and the State Pension is the foundation of state support for older people.”
Murray also highlighted the government’s commitment to the Triple Lock policy, saying: “The Government is committed to the Triple Lock for the duration of this parliament, and in April 2025, the basic and new State Pension will increase by 4.1 per cent. This means that pensioners on a full new State Pension will get a boost of £470 to their incomes from April this year.”
He added that based on the Office for Budget Responsibility’s latest forecast, “Over the course of this Parliament, the yearly amount of the full new State Pension is currently forecast to go up by around £1,900, based on the Office for Budget Responsibility’s latest forecast.”
Mr Murray addressed the income tax Personal Allowance, stating: “The previous Government made the decision to freeze the income tax Personal Allowance at its current level of £12,570 until April 2028. At our first Budget, we decided not to extend the freeze on personal tax thresholds, meaning they will rise with inflation from April 2028.”
It’s important to highlight that individuals solely receiving the full New State Pension won’t be subject to income tax for the forthcoming two years. However, older people with supplementary income from employment or private or workplace pensions may be required to pay tax.
