State pension set to rise by 4.7% under the triple lock

Pensioners will get a boost from April next year, with the state pension looking set to rise by more than 560 a year.

- KARL MATCHETT

That's because of the rules around the state pension triple lock and how recent economic data sets out the likelihood of a rise.

At present, increases to the state pension are decided by either inflation, wage growth or 2.5 per cent - whichever is the highest. That is to ensure pensioners' income doesn't leave them trailing as living costs continue to increase - though with people living longer and the pension bill escalating rapidly, change is likely to come in the future.

The latest employment data released by the ONS shows the UK job market continuing to cool, with unemployment holding firm at 4.7 per cent and wage growth slowing to 4.7 per cent - one of the three factors dictating state pension payment changes.

How much is the state pension and how much will it go up? We now only await September's inflation rate - announced midOctober as the last piece of the puzzle to determine the exact increase in the state pension.

However, the likelihood of it outstripping 4.7 per cent wage growth is minimal, given expectations are of it to be around the 4.0 per cent mark.

Right now, the full new state pension is £230.25 a week, or £11,973 per year.

A 4.7 per cent increase, then, means £241.05 a week - giving £561 more per year, totalling about £12,534 for those who get a full new state pension.

Those on the old basic state pension will not get the full rise, as part of it only rises along with inflation.

Will I need to pay tax?

An important point to note is that with that rise in state pension income comes another dilemma for those receiving it: the potential for paying taxes they didn't previously need to.