State pension likely to rise by 4.7% in April

According to the most recent wage estimates, people drawing their new state pension starting in April are expected to see a rise of more than £500 per year. The state pension goes up each year by either 2 or 2 percent under the triple lock scheme. Whether it's 5%, inflation, or average wage growth, the highest estimate is the highest figure. The Office for National Statistics (ONS) reported that total compensation for the three months to July was $44. 7%, which is expected to be the figure used for the annual increase. Almost 13 million people are eligible for the state pension in the United Kingdom, and new estimates show that pensioners will pay income tax on it from 2027 for the first time.

The latest ONS wage estimates suggest that with inflation expected to be 4% in September, it is likely that Tuesday's average wage growth figure would be used to determine the increase in the state pension for the third year in a row. The new state pension, according to Sir Steve Webb, a partner at pension consultants LCP and former pension consultant, was ever closer to the frozen personal tax exemption, which now stands at £12,570 and is projected to remain at the same level until 2028. The standard personal allowance is the amount of income that can be taxed each year without having to pay income tax. Come April 2027, Sir Steve said that someone with no other income aside from the new state pension is likely to be a taxpayer.

It is already the case that nearly three quarters of all pensioners pay income tax, and the continuing freeze in tax thresholds, as well as steady rises in pensions, will bring more pensioners into the tax net,

Linda, a retired hairdresser from Wokingham, told the BBC that she was concerned that her state pension was being pushed towards the tax threshold.

They're giving it on one hand and taking it from the other,

If they could raise the tax threshold, it would make a huge difference.

According to the ONS, regular wage growth, which excludes bonuses, has decreased to 4. 4%, down to 4. 8% in the three months to July, down from 5% in the previous three months and the lowest since May 2022. The public sector's average rise in averages was 5. Over the same period, employment gains in the private sector were down by 6%, while wage increases in the service sector were 4. 7%. Despite salary increases being pushed lower in cash terms, Liz McKeown, ONS' director of economic statistics, said wage increases were still

strong by historic standards. However, KPMG's chief economist, Yael Selfin, said earnings growth was

Demand for employees has dropped sharply as a result of lower economic growth and companies facing higher labour costs. As a result, wage increases are expected to decline below 4% by the end of the year,

Not all pensioners receive the full state pension because it is based on years of qualifying contributions through the National Insurance system. For those retired, the state pension is not their only source of income, as they will also receive money from employer or private pensions. Following health care, the state pension is the second-largest item in the government budget after health care. The Conservative-Liberal Democrat coalition arranged the triple lock in 2011 to ensure that the state pension was not overvalued by the increase in the cost of living or the incomes of working people. However, there has been a lot of discussion over the triple lock's cost and whether it is justified, with Chancellor Rachel Reeves pledging that the Labour government will keep it in force until the end of the new parliament. The government's official forecaster said in July that the cost of the triple lock guarantee would be three times higher by the end of the decade than was expected when it was first introduced. The government has promised to honour the triple lock for the course of this parliament, according to Work and Pensions Secretary Pat McFadden.

It is expected that it would result in a rise in the State Pension of around £1,900 a year by the end of the parliament,

The most recent ONS results showed that the UK unemployment rate remained at 4%. The three months to July saw 7%, the highest level since May 202. There was also a 10,000 decrease in vacancies over the quarter to August, according to the number of payrolled employees, who dropped by 8,000 last month. According to Ms McKeown, the labour market was still to cool with businesses notifying the ONS that there were fewer jobs open. However, the decline appears to be slowing, she said.