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State Pension set to rise by 3.9% in 2027/28

That would take the weekly payout from £241.30 to about £250.70.

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State Pension set to rise by 3.9% in 2027/28
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The State Pension is set to rise by 3.9% in 2027/28 after annual earnings data from the Government was published for May to July 2026.

That would take the weekly payout from £241.30 to about £250.70, and bring the annual full flat-rate state pension, for those who reached SP age after April 2016, to £13,036.40.

The old basic state pension, for those who reached state pension age before April 2016, is estimated to be about £192.10 a week, or £9,989.20 a year.

Reaction: 

David Brooks, head of policy at Broadstone: 

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“The earnings growth data looks set to provide another big boost to the State Pension from next year, delivering a welcome financial uplift to retirees as we head towards a challenging winter.

“The full new State Pension now exceeds the Personal Allowance, a landmark that will inevitably draw further attention to the impact of frozen tax thresholds and the substantial increases we have seen in the State Pension over recent years.

“The increase will sharpen the question of whether the triple lock remains affordable over the long term given the UK’s precarious public finances. 

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“It is important not to throw the baby out with the bathwater as protecting pensioner living standards remains vital, but the system also has to be fair and financially sustainable across generations.

“Transitioning to a double lock that protects increases in line with working-age benefits would seem the most likely compromise given it is today’s workers who ultimately fund the State Pension.”

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Jason Hollands, managing director at Evelyn Partners: 

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“While pensioners and those nearing state pension age will largely welcome another significant increase to the state pension, this will of course do nothing to temper the debate around the affordability of the triple lock.

“As reforming or dropping the triple lock seems to be regarded as politically toxic by all the major parties, the crunch in the public finances could well see the next increase in the SP age – from 67 to 68 – brought forward from the scheduled 2044/46 period, in an effort to address the state pension affordability crisis. 

“That could catch out the cohort currently 55 or younger, who might have to work longer or rethink retirement funding.

“The boost to the SP means that retirees who have no income other than the state pension and are on the full flat rate could incur an income tax liability of £93 in 2027/28. 

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“The new £13,036.40 annual payout would exceed the personal income tax allowance by just over £466, and at the basic rate of income tax that could mean just over £93 is owed to HMRC.

“That is slightly up in the air for a couple of reasons. One is that the Government have hinted that those who receive the SP alone will not be charged income tax on it, although no details on or confirmation of this policy have been forthcoming. 

“If it is confirmed, that could be viewed as unfair by those who do have a small private income and do have to pay the tax.

“Another is that PM Andy Burnham has suggested he would – in an ideal world – like to unfreeze the personal allowance to take more people out of paying tax, although this seems unlikely for next April given the current fiscal conditions.”

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