Millions of pensioners are likely to see their state pension rise by around 4.7% in April – worth over £500 more a year for many.

This is because of the “triple lock” system, which guarantees the state pension increases each year by whichever is highest out of:

- 2.5%

- Inflation

- Average wage growth

The latest official figures show wages, including bonuses, grew by 4.7% in the three months to July. Unless inflation ends up higher when September’s numbers are published, that figure will be used to set the increase.

What that means in real terms:

- New state pension (for those who reached pension age after April 2016): set to rise to £241.05 a week, or £12,534.60 a year – up £561.60.

- Basic state pension (for those who qualified before April 2016): expected to rise to £184.75 a week, or £9,607 a year – up £431.60.

Around 13 million people currently receive the state pension.

A tax trap for pensioners?

While the rise is good news, some worry that it just pushes more pensioners into paying tax. The personal allowance – the amount you can earn before paying income tax – is frozen at £12,570 until 2028. That means anyone with only the new state pension will likely start paying tax by 2027.

She admits she manages only because her husband has a good pension. Living on the state pension alone, she says, would be “a struggle.”

What’s happening with wages?

Regular wage growth (excluding bonuses) slowed slightly to 4.8% in the three months to July – the lowest since mid-2022.

Economists warn it could fall further. KPMG’s Yael Selfin said demand for workers is weakening as businesses face higher costs, predicting wage growth could slip below 4% by the end of the year.

Why the triple lock matters

The triple lock, introduced in 2011, was designed to make sure pensions don’t lose value compared with rising prices or wages. It’s expensive, though – official forecasts suggest it will cost three times more by the end of the decade than first expected.

Even so, the Labour government has pledged to keep it until at least the end of the current parliament.