The state pension is on course to rise by 4.7% after the latest UK labour reading, according to the Office for National Statistics (ONS).
Regular wage growth (excluding bonuses) dipped to 4.8% between May and July, down from 5%, but total pay packages (including bonuses) were up 4.7%, 10 basis points ahead of the previous period.
Under the triple lock, the state pension will rise by the highest of the following: average earnings growth in May to July, September’s inflation figure or 2.5%.
This means the new full state pension will rise from its current level of £230.25 per week to £241.05 per week from April, or £12,534.60 annually, under the triple-lock pension scheme, unless September’s inflation print is higher than wage growth.
The basic state pension would also rise from £176.45 per week to £184.75.
Rachel Vahey, head of public policy at AJ Bell, said: “Pensioners will be rejoicing at the prospect of an inflation-busting rise to the state pension from April next year as a result of the triple-lock guarantee.”
However, she noted that this puts the figure above £12,000 for the first time and “perilously close” to the personal allowance of £12,570.
It also leaves chancellor Rachel Reeves with a quandary, as the rising pension will add more burden to the government’s finances. Last week, Rathbones multi-asset manager David Coombs told Trustnet that he believes the government will look to scrap the triple-lock in the upcoming Budget.
In July, the government revived the Pensions Commission as part of a long-term plan to address the pension under-saving crisis of those due to retire in the mid-century.
Following today’s figures, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said the rise will “add further pressure on the government, which is battling an already burgeoning state pension bill”.
“The government has committed to keeping the triple lock in place for the rest of this parliament but longer term, its future could be uncertain,” she said.
Vahey added that an overhaul of the triple lock would come with “huge political risk” before the next general election. Instead, the government could look to raise the personal allowance, but this would also come at a “significant cost to the Treasury at a time when the chancellor’s fiscal headroom is already strained at best”.
The figures also cause difficulty for the Bank of England ahead of its meeting on Thursday, according to analysts.
The ONS data showed the number of payrolled employees fell by 142,000 between July 2024 and July 2025, although the unemployment figure held steady at 4.7%.
There were 6,000 fewer payroll jobs in July than the previous month after figures were revised in the latest reading, while a further 8,000 jobs were lost in August.
Richard Carter, head of fixed interest research at Quilter Cheviot, said: “Still high wage growth, albeit slightly lower than last month’s, will no doubt fuel the increasing concerns over inflation, particularly if tomorrow’s inflation print comes in hot, and the weaker employee numbers add pressure to what is already a difficult balancing act.
“The MPC [Monetary Policy Committee] is expected to hold rates for now, but this continued weakness in the labour market may encourage the doves on the committee to continue voting for lower rates.”
Nicholas Hyett, investment manager at Wealth Club, added that, with wages rising faster than inflation and inflation itself still high, it seems unlikely the Bank of England “will ride to the rescue with interest rate cuts in the near term”.
“This is not the pro-growth economy the government was hoping for when it was elected, and there is a real danger that economic conditions continue to cool as we go through autumn.”