State Pension key deadline looms that could offer hint of future monthly payments

Pensioners across the UK will soon get clearer information on their next monthly income boost.

The Consumer Price Index (CPI) inflation rate is a key component of the Triple Lock policy that dictates the annual increase in benefits. The latest data from the Office for National Statistics (ONS) shows that UK inflation dropped to 3.4 per cent in May, down from 3.5 per cent in April.

The yearly growth in employees' average wages for regular earnings (excluding bonuses) was 5.6 per cent, and total earnings (including bonuses) was 5.5 per cent. Under the Triple Lock measure, State Pensions rise each year in line with whichever is the highest of average annual earnings growth from May to July, CPI in the year to September, or 2.5 per cent.

In April, the New and Basic State Pension rose by 4.7 per cent, meaning someone on the full New State Pension now receives £230.25 per week, or £921 every four-week pay period.

Those on the full Basic State Pension receive £176.45 each week, or £705.80 every four-week pay period, reports the Daily Record.

Predictions for the State Pension uprating for 2026/27

The Triple Lock is currently set to be determined by the earnings growth element, which stands at 5.5 per cent. However, this figure may vary and isn't the final metric that will determine the level of uprating.

The next CPI figure will be published by the ONS on 17th July.

A potential 5.5 per cent increase on the current State Pension could result in the following payouts:

Full New State Pension

• Weekly: £242.90
• Four-weekly pay period: £971.60
• Annual amount: £12,630.80

Full Basic State Pension

• Weekly: £186.25
• Four-weekly pay period: £744.60
• Annual amount: £9,679.80

The annual adjustment won't be confirmed until the Autumn Budget, but pensioners - and those due to retire next year - can start to plan their finances by following the Triple Lock measurements. The September CPI figure will be published in mid-October, while the wages growth figure is typically released in August.

State Pension and tax

Earlier this year, the Labour Government confirmed that the Personal Allowance will remain frozen at £12,570 until April 2028.

If the New and Basic State Pension increased by the lower measure of the Triple Lock (2.5%), it would see the full New State Pension exceed the income tax threshold by nearly £79 in the 2027/28 financial year (£12,578.80).

While the amount of State Pension to be taxed may seem relatively small - tax is only paid on the amount over the Personal Allowance - older people with other income streams could find themselves having to part with more cash to pay a tax bill, if it's not automatically deducted from private or workplace pensions through PAYE.

And remember, that figure is based on the lower measure of the Triple Lock. Using the current projections, more pensioners could be dragged into the retirement tax net sooner, especially if they have additional income through a private or workplace pension.

What is taxed

Official guidance states: "You pay tax if your total annual income adds up to more than your Personal Allowance. "

Your total income could include:

• the State Pension you get - Basic or New State Pension
• Additional State Pension
• a private pension (workplace or personal) - you can take some of this tax-free
• earnings from employment or self-employment
• any taxable benefits you get
• any other income, such as money from investments, property or savings

Check if you have to pay tax on your pension

Before you can check, you will need to know:

• if you have a State Pension or a private pension
• how much State Pension and private pension income you will get this tax year (April 6 to April 5)
• the amount of any other taxable income you'll get this tax year (for example, from employment or state benefits)

You cannot use this tool if you get:

• any foreign income
• Marriage Allowance
• Blind Person's Allowance

Use this online tool at GOV.UK to check if you have to pay tax on your pension. The full guide to tax when you get a pension can be found on GOV.UK here.