Triple lock poised for 4.7pc uplift as pressure mounts on Reeves

The state pension is poised to increase by 4.7pc next year, piling more pressure on Rachel Reeves as she seeks to balance the books.

The proposed uplift means that payments to retirees are on track to rise by more than £560 to around £12,536 from April, according to the latest data from the Office for National Statistics.

That represents an increase to £241 per week for the full new state pension, up from £230.25.

Under current rules, the triple lock promises to increase the state pension every April in line with whichever is highest out of the previous September’s inflation, wage growth or 2.5pc.

With inflation expected to remain below 4pc, it is likely the Government will set the triple lock uplift in line with total pay, which estimates that wages – including bonuses – rose 4.7pc in three months to July, compared to the same period of last year.

The ONS will revise this estimate next month, giving a final figure on which to base the forthcoming triple lock increase.

This boost for pensioners comes as economists expect the Chancellor to raise taxes in her Budget on Nov 26, as she seeks to fill a hole in the public finances.

Mounting welfare payments, including the state pension, are among a series of factors troubling Rachel Reeves.

At the time of the Spring Statement in March, she planned to exclude all but the lowest income pensioners from winter fuel payments, and to limit the growth in benefits to adults of working age.

However, a rebellion from Labour MPs forced her to change tack.

The latest above-inflation rise in the state pension will create further strain for Ms Reeves, owing to the impact on the public purse. The increase in the state pension means the typical pensioner will have to pay income tax even if they only have a modest private income.

That is because the income tax allowance is frozen at £12,570 – just £34 per year above the anticipated level of the full new state pension.

David Brooks, at financial services consultancy Broadstone, said uplift highlights the rising fiscal pressures in Britain – potentially imperilling the future of the triple lock itself.

“The good news for millions of pensioners is that they will receive hundreds of pounds more income every year at a time when many still face persistent cost-of-living pressures and depend heavily on the State Pension as their main income,” he said.

“At a time of strained public finances, however, the rising cost of funding this benefit will once more come under scrutiny.