State pensioners get £1,300 more after triple lock boost | Personal Finance | Finance
State pensioners are set to be £1,300 better off in 2026 thanks to the triple lock, according to new analysis from financial firm Vanguard.
The investment experts say that the triple lock will help the new state pension to hit an ‘inflation busting’ £12,548 per person in 2026, as wage growth pushes pension payouts up by another 4.8% in the new tax year. The triple lock dictates that the state pension must rise by the highest of three metrics: wage growth, inflation or a flat 2.5%. Vanguard explains that the wage growth element of the triple lock is the biggest driver of state pension boosts in recent years, giving state pensioners £1,300 above inflation.
Vanguard’s analysis says: “New analysis from Vanguard reveals that pensioners are set to be £1,300 better off next year because of the triple lock.
“This comes as September inflation is today confirmed at 3.8%, confirming that the state pension is set to rise 4.8% in line with wages. The new state pension has risen under the triple lock since 2016, (with a Covid driven year’s break for the tax year 2022-23). This means that it rises in line with the highest of average earnings in the three months to July; the previous September’s inflation figure or 2.5% each year.
“Vanguard’s analysis examines how state pension payments would have increased if it was uprated by inflation alone versus the triple lock since its introduction – highlighting just how valuable the current uprating system is.
“Next year the state pension, for those receiving the full amount, is set to rise to £12,548 a year. If it was linked to inflation alone, it would be £11,267 – meaning recipients will be almost £1,300 better off due to the triple lock.”
James Norton head of retirement and investments at Vanguard said: “The value of the triple lock is clear, as September inflation today comes in at 3.8% meaning the state pension is set for an inflation busting rise of 4.8%.
“Our analysis shows that next year those receiving the full new state pension will be almost £1,300 better off thanks to the triple lock, compared to if there was just an inflation link in place.
“This is good news for retirees, as the state pension is key to most people’s retirement plans and will mean much of their basic expenditure will be covered with this guaranteed income.
“For those with other sources of retirement income, given the personal allowance remains frozen at £12,570 and the higher-rate tax threshold has stayed at £50,270, a considered approach to tax and retirement is needed to make sure you keep as much of your hard earned savings as possible.”
