State pensioners set for £500 triple lock hike - but there's bad news

Pensioners don't need telling how valuable the mechanism is. It's done sterling work in reducing later life poverty since 2011.

Millions should get fresh proof of its value next April, when experts predict the full new state pension could potentially rise by as much as 4.5% from today's £11,973.

That would work out as a pensioner 'pay rise' of £539, lifting the maximum sum to £12,512 a year.

Even a smaller 4% uplift would still deliver an extra £478.

The triple lock raises the state pension each April by the highest of inflation, earnings growth or 2.5%. Early signs suggest earnings are the most likely driver for the April 2026 hike.

Average pay rose 4.6% in the three months from April to June, according to the Office for National Statistics.

For triple lock purposes, the key period is May to July. Growth looks set to slow but only slightly, to between 4% and 4.5%.

Inflation was just 3.6% in June but the Bank of England forecasts it will hit 4% by September, the month used for the triple lock calculation. One way or another. the state pension is likely to rise by at least 4% next year. That 2.5% backstop won't be required.

That's great news but as always in life, there's a catch. In fact, I've counted four.

First, as Sarah Coles at Hargreaves Lansdown has pointed out, food and energy prices are rising faster than overall inflation.

This hits pensioners hard as they spend more of their income on those essentials, and need every penny in extra state pension. So this is hardly an inflation-busting bonanza.

Second, the triple lock applies to both the new and basic state pension, paid to older pensioners. The basic state pension is notably lower, worth £9,175 at most.

A 4% rise would increase that by £412 to £9,587. That means older retirees getting £125 less than those who retired after April 5, 2016. So the gap between the two will widen again.

While basic state pensioners also receive additional top-ups such as Serps and S2P, these don't benefit from the triple lock. They rise with inflation. Don't ask why. Nobody knows.

Third, by April 2026 the full new state pension will be a whisker away from the frozen personal allowance of £12,570.

Pensioners only need to earn a few pounds in extra income to be drawn back into HMRC's tax net. Some may face a tax bill for the first time in years.

From 2027, any pensioner on the full rate will almost certainly pay income tax on it, creating the absurd situation where the DWP hands money to millions, and HMRC immediately claws some back.

Finally, the triple lock's success could trigger a political backlash.

Laith Khalaf at AJ Bell warns it may be hacked back in future, with Chancellor Rachel Reeves desperate for extra revenue in the autumn Budget.

Samuel Mather-Holgatel at Mather and Murray Financial says some kind of state pension reform is inevitable, predicting the retirement age could rise to 70.

He added: "Changing the triple lock would save a fortune. But that would be politically difficult as the older generation vote."

I see one potential positive. Even a 4.5% hike would be much less than the 10.1% pensioners got in 2022 and 8.5% in 2023. If inflation falls next year as expected, future hikes could be lower, and some of the heat could go out of the debate.

The triple lock looks safe for now and as pensioners know, it's worth fighting for. The Daily Express will continue to do just that.