Analysts have said that wage growth is expected to determine the increase in the state pension, potentially giving pensioners a £517 boost next year.
Total pay, including bonuses, rose by 4.5% in the three months to June, down from 5.7% in the previous period due to last year’s NHS one-off bonuses.
This figure, significantly higher than inflation or 2.5%, is likely to be used for state pension uprating next month under the triple lock.
If this rate holds, the full new state pension could increase by around £517, bringing it to approximately £12,019 per year.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, commented:
“Wage growth remains robust, making it highly likely that next month’s figure will be used to uprate the state pension under the triple lock.
Such an increase will be welcomed by pensioners still recovering from the cost-of-living crisis. However, with many losing their Winter Fuel payment, it won’t be quite the boost many had hoped for.
Another challenge is the frozen tax thresholds, which mean the full new state pension is edging closer to taxable territory. A similar increase next year could push it over the threshold.
With these freezes in place until 2028, pensioners relying solely on the state pension might find part of it subject to tax.”
