Andy Burnham’s government looks set to raise the State Pension by £540 next year (Image: Getty)
Andy Burnham’s government looks set to raise the State Pension by £540 under the triple lock next year. The Prime Minister appeared to commit himself to the pensions measure when he entered Downing Street in July, telling Reddit users it was “important” Labour’s 2024 general election manifesto commitment to the triple lock stands.
Discover more
Western Europeans
Politics
Campaigns & Elections
The rule guarantees the State Pension rises each year by the highest out of three metrics: inflation, average earnings growth or a flat 2.5%. With wage growth, including bonuses, at 4.3%, this measures currently looks likely to determine the next rise.
UK wage growth slowed to 3.4% for regular pay and 4.3% for total pay in the first quarter of 2026, according to the Office for National Statistics.
Real wage growth adjusted for inflation remained marginal at 0.3%, using CPIH, which includes owner-occupier housing and council tax costs. The latest Consumer Prices Index inflation rate of 2.6% is below the earnings growth rate.
An increase set by wage growth would mean £10.30 a week for state pensioners on the full State Pension. This would increase payments to £251.60 or £13,086 a year, up by £540.
News of the possible increase comes as the triple lock policy remains under pressure from critics and Britain’s straitened public finances.
The Office for Budget Responsibility (OBR) warned in July that the triple lock will add billions of pounds to public spending in the decades ahead.
Under the agency’s baseline scenario, State Pension spending is projected to rise from 5% of Gross Domestic Product (GDP) to about 9% by 2075-2076.
This is partly driven by there being more older people in the population, while the triple lock is estimated to account for about a third of this rise, according to the OBR.
Volatile inflation and earnings growth means the triple lock has been more costly than initially expected when the measure was introduced in 2012.
The OBR estimates that the triple lock will have added about £15.5billion to state pension spending each year by 2029-2030 – up from the £5.2bn a year which was originally costed.
The Organisation of Economic Co-operation and Development (OECD) last month urged the Government to reform the triple lock.
In a report, the OECD said: “Given political economy challenges and the existing commitment to the triple lock guarantee over the current Parliament, the Government’s effort should focus on setting the ground for lasting reform.”