UK state pension to rise £514 annually from April 2027, exceeding tax-free limit

The UK state pension is projected to rise by over £500 a year from April 2027, driven by the government's triple lock guarantee, but the increase will push the full new pension above the income tax threshold for the first time. The move is set to create a complex tax situation for millions of retirees, with the government pledging to ensure those whose sole income is the state pension will not pay tax.

Under the triple lock mechanism, the state pension increases each year by the highest of inflation, average earnings growth, or 2.5%. The latest official data shows average earnings growth, including bonuses, stood at 4.1% for the period from April to June 2026. This figure is widely expected to be the determining factor for the next uprating, as the most recent Consumer Price Index inflation rate was 2.6%. The final earnings growth figure used for the calculation will be based on data from May to July, which is due to be published in September.

If the 4.1% increase is confirmed, the full new state pension would rise from its current weekly rate of £241.30 to approximately £251.20. This represents an annual increase of about £514, taking the total yearly payment to just over...