Pensioners could soon be due nearly £1,000 every month | Retirement | Finance

Pensioners in the UK could be due almost £1,000 a month due to a planned increase in payments. People on the full New State Pension could be paid as much as £971.60 every four weeks from the Government.

Nearly 13 million State Pensioners across Great Britain, including over one million living in Scotland, are being advised to monitor the Consumer Price Index (CPI) inflation rate. This is because it forms part of the Triple Lock measure which determines the annual increase for the contributory benefit.

As highlighted by the Daily Record, the most recent data from the Office for National Statistics (ONS) reveals that UK inflation rose to 3.5% in April, a jump from 2.6% in March.

The annual growth in employees’ average wages for regular earnings (excluding bonuses) was 5.6% and total earnings (including bonuses) was 5.5%.

Under the Triple Lock measure, State Pensions rise each year in line with whichever is the highest of average annual earnings growth from May to July, CPI in the year to September or 2.5%.

The New and Basic State Pension increased by 4.7% in April, meaning someone on the full New State Pension currently receives £230.25 per week, or £921 every four-week pay period.

Those on the full Basic State Pension receive £176.45 each week, or £705.80 every four-week pay period.

Predictions for the State Pension uprating for 2026/27 indicate that the Triple Lock is currently set to be determined by the earnings growth element, which stands at 5.5%. However, this figure may fluctuate and isn’t necessarily the final metric that will determine the level of uprating.

The next CPI figure will be released by the ONS on June 18. That being said, a 5.5% increase on the current State Pension would see people receive the following amounts.

Full New State Pension

• Weekly: £242.90 (up from £230.25)
• Four-weekly pay period: £971.60 (up from £921)
• Annual amount: £12,630.80 (up from 11,973)

Full Basic State Pension

• Weekly: £186.25 (up from £176.45)
• Four-weekly pay period: £744.60 (up from £705.80)
• Annual amount: £9,679.80 (up from £9,175.40)

The annual uprating won’t be confirmed until the Autumn Budget, but pensioners – and those due to retire next year – can start to plan their finances by following the Triple Lock measurements. The September CPI figure will be published in mid-October, but the wages growth figure is usually published in August.

Earlier this year, the Labour Government confirmed that the Personal Allowance will remain frozen at £12,570 until April 2028.

If the New and Basic State Pension increased by the lower measure of the Triple Lock (2.5%), it would see the full New State Pension exceed the income tax threshold by nearly £79 in the 2027/28 financial year (£12,578.80).

While the amount of State Pension to be taxed may seem relatively small – tax is only paid on the amount over the Personal Allowance – older people with other income streams could find themselves having to part with more cash to pay a tax bill, if it’s not automatically deducted from private or workplace pensions through PAYE.

And remember, that figure is based on the lower measure of the Triple Lock. Using the current projections, more pensioners could be dragged into the retirement tax net sooner, especially if they have additional income through a private or workplace pension.

What is taxed

Guidance on GOV.UK states: “You pay tax if your total annual income adds up to more than your Personal Allowance. Find out about your Personal Allowance and Income Tax rates.”

Your total income could include:

• The State Pension you get – Basic or New State Pension
• Additional State Pension
• A private pension (workplace or personal) – you can take some of this tax-free
• Earnings from employment or self-employment
• Any taxable benefits you get
• Any other income, such as money from investments, property or savings.

Check if you have to pay tax on your pension

Before you can check, you will need to know:

• If you have a State Pension or a private pension
• How much State Pension and private pension income you will get this tax year (April 6 to April 5)
• The amount of any other taxable income you’ll get this tax year (for example, from employment or state benefits).

You cannot use this tool if you get:

• Any foreign income
• Marriage Allowance
• Blind Person’s Allowance.

The full guide to tax when you get a pension can be found on GOV.UK here.