People on full New State Pension set for £40 monthly pay boost under Triple Lock (2024)

New figures published by the Office for National Statistics (ONS) earlier this month show that average regular earnings growth dropped to 4.5 per cent (including bonuses) in the three months to June. This is down from 5.7 per cent last month and is the result of a one-off bonus paid to NHS staff last June.

This is an important figure for 12.7million State Pensioners across Great Britain to be aware of as it looks set to be the driving measure for the annual April uprating, under the Triple Lock policy. However, it’s important to be aware that the earnings growth figure used for the Triple Lock is for the period between May to July and that won’t be published by the ONS until September.

Under the Triple Lock the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July, CPI in the year to September, or 2.5 per cent.

The latest earnings growth figures could see the full New State Pension rise by nearly £10 per week from £221.20 to £231.15, and as the payment is usually made every four weeks this amounts to £924.60. This would give pensioners a monthly income boost of £39.80.

Similarly, the full Basic State Pension could rise by £7.60 per week from £169.50 to £177.15, or £708.60 every four-week payment period. This would give a monthly income boost of £30.40.

Given that inflation is currently 2.2 per cent, pension experts agree it is likely that wage data will be used for the uplift.

Helen Morrissey, head of retirement analysis, Hargreaves Lansdown, said: “Wage growth remains robust, so it’s highly likely that next month’s figure will be the one used to uprate State Pension under the Triple Lock. This month’s figure comes in at 4.5 per cent - way down on last month’s 5.7 per cent, but it has been affected by the payment of one-off bonuses in the NHS last year.

“If the figure were to remain the same next month, then we could see the full New State Pension get a boost of around £517 - taking it to approx. £12,019 per year.”

The retirement expert continued: “Such a rise will be welcomed by pensioners still emerging from the cost of living crisis. However, with many still reeling from the news that their Winter Fuel Payment is to be taken away, it won’t be quite the boost that many hoped for.”

Ms Morrissey also explained how the freeze on the Personal Allowance at £12,570 is going to push even more pensioners closer to the tax threshold.

She explained: “There’s another looming challenge - frozen tax thresholds mean that the full New State Pension is creeping ever closer to tax paying territory and a similar rise next year could see it surpass it. With these freezes in place until 2028, there’s every chance we could see pensioners solely reliant on the State Pension finding part of it is making its way to the taxman.”

The latest data from the Hargreaves Lansdown Savings and Resilience Barometer shows only 38 per cent of households are currently on track for a moderate retirement income so there is already a mountain to climb. How to deal with the impact of long-term illness on the workforce will be a major challenge facing the new Labour government.

Steven Cameron, Pensions Director at Aegon, said the NHS bonus paid last year is expected to “suppress the figure due to be announced next month” but added that it is “highly likely that the increase will be based on earnings growth”.

He continued: “The specific figure used for determining the Triple Lock is the year-on-year increase in earnings for the period ending May to July 2024, which will be published next month in mid-September. Barring any big fluctuations when July’s earnings figures are added in, this suggests State Pensioners may receive around a 4.5 per cent increase.

“The June 2023 NHS one-off bonus will also affect the May to July 2024 calculation, which will be a disappointment to state pensioners who might otherwise have received a higher increase.”

He also highlighted how 10 million pensioners will miss out on at least £200 in Winter Fuel Payments this year. He said: “While next April’s State Pension increase is likely to be higher than current inflation, any increase in ‘real’ terms will be significantly dented by the loss of the Winter Fuel Payment.”

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