Estate Planning & Inheritance Tax
October 13, 2025

State Pension set to rise by 4.7% in April 2026

The State Pension is due to increase by 4.7% next April, following the latest figures from the Office for National Statistics (ONS), published on 16 September.

This annual wage growth figure determines the level of increase under the State Pension Triple Lock — the mechanism that ensures the State Pension rises each year by the highest of earnings growth, inflation, or 2.5%.

While this year’s uplift is smaller than some recent increases, it still represents an inflation-beating rise for millions of pensioners across the UK.

Under the new rates:

  • New State Pension: rising from £230.25 to £241.05 per week
  • Old State Pension (for those who reached State Pension age before 6 April 2016): rising from £176.45 to £184.75 per week

This brings the annual State Pension income to £12,535, just £35 below the income tax personal allowance. From 2026, it’s likely that further rises will take pension income above this threshold.

The Triple Lock debate

For many retirees, the State Pension forms a crucial part of their financial security. It isn’t designed to cover all living costs, but it provides a guaranteed income that helps protect against inflation.

Since its introduction in 2010, the Triple Lock has played a key role in maintaining pensioners’ living standards — especially in years when wage growth has been weak.

However, the policy has become increasingly contentious. Its cost to the Treasury grows each time inflation or wages spike, raising concerns about long-term affordability as the population ages.

Critics argue it places too much strain on public finances and may become unsustainable. Supporters counter that it’s essential to protect older generations who often have limited ways to increase their income once retired.

With ongoing wage and price volatility, political debate around the future of the Triple Lock is intensifying. Parties are divided on whether to reform, replace, or retain the system in its current form.

Affordability and the bigger picture

The 4.7% rise will undoubtedly be welcomed by retirees managing high living costs, particularly energy and food bills. But the Government faces a difficult balancing act between supporting pensioners and managing fiscal pressures.

The number of people over State Pension Age (SPA) continues to rise, while the working-age population — those funding the system through taxation — grows more slowly. This shift raises important questions about sustainability.

Possible reforms could include:

  • Increasing the State Pension Age further
  • Introducing means testing
  • Replacing or modifying the Triple Lock

Although the policy remains in place for now, its future is far from certain. Economic pressures and political priorities could easily lead to change.

For those yet to retire, this uncertainty highlights the importance of building private retirement income alongside the State Pension. Workplace pensions, personal pensions, ISAs, and other investments all contribute to a more secure financial future. Ensuring these are structured effectively and invested wisely can make a significant difference to your quality of life in later years.

How Aetas can help

At Aetas Wealth, we help clients assess whether their existing pension arrangements are sufficient, identify potential shortfalls, and create tailored, sustainable income strategies for later life.

With the long-term future of the State Pension unclear, taking control of your private retirement planning has never been more important. Whether you need to review your plans, protect your assets, or simply gain peace of mind, sometimes all it takes is a fresh pair of eyes – Book a meeting or request a callback from one of our experienced team to review your plans.

Aetas Wealth is a trading style of Insight Financial Associates Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA No. 458421).

Sources:
www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/september2025
www.theguardian.com/money/2025/sep/16/uk-state-pension-what-is-the-triple-lock-and-could-it-be-ditched
www.ageuk.org.uk/information-advice/money-legal/pensions/state-pension/basic-state-pension/
www.pensionsage.com/pa/OBR-figures-prompt-calls-for-govt-to-review-state-pension-uprating-and-adequacy.php