How much could the state pension pay in 2024?
Inflation remained at 6.7% in September according to the latest figures from the Office for National Statistics (ONS), so it's unlikely to be used to boost the state pension in April.
The state pension is protected by the ‘triple lock', which means the benefit is boosted every year by either September’s inflation, earnings growth (from the period between May to July), or 2.5% – whichever is highest.
Today's inflation figure is the final piece of the state pension puzzle and that indicates soaring wage growth (which the ONS measured at 8.5%) will be the figure used in the uprating calculation in 2024-25. However, there is speculation the government could use a lower figure of wage growth that excludes bonuses.
Here, we explain how much the state pension is likely to rise next year and how much your weekly payments could change.
How much could the state pension rise?
If the government continues to use the triple lock formula, then the state pension would rise by wage growth figures as these came in higher than September's inflation.
Average earnings growth
The government takes the average wage growth year-on-year for the May to July period.
According to ONS figures released on 12 September, this figure was 8.5% (including bonuses).
Wage growth has been affected by NHS and Civil Service one-off payments which were made in June and July and is the highest regular annual growth rate since comparable records began in 2001.
The figure drops to 7.8% if bonuses are excluded.
CPI inflation
The Consumer Prices Index (CPI) is a measure of inflation that tracks the overall price changes for a basket of more than 700 popular goods and services.
The triple lock uses September's CPI inflation figure, which was 6.7% - the same figure recorded for August, according to ONS figures released today (18 October).
How much state pension could you get next year?
In 2023-24, the full level of the new state pension is £203.85 a week, or £10,600.20 a year.
The basic state pension (paid to those who reached state pension age before April 2016) currently pays £156.20 a week or £8,122.40 a year.
We've crunched the numbers to estimate how much the payment could rise depending on the figure the government uses.
Earnings growth including bonuses
If the state pension is boosted by 8.5%, this would mean the full new single-tier state pension would be worth £11,502.40 a year - a rise of over £902. This means those eligible would receive £221.20 a week (rounding up to the nearest 5p).
An 8.5% increase would mean the basic state pension would pay £8,814 a year in 2024-25 - a rise of over £691. This means those eligible would receive £169.50 a week (rounding up to the nearest 5p).
Earnings growth excluding bonuses
If the government decides to use the 7.8% figure on wage growth which excludes bonuses, pensioners will still get a sizeable boost from April.
The full rate of the new state pension for 2024-25 would be worth £219.75 a week, or £11,427 a year - an increase of £826.80.
While the basic state pension could be worth £168.40 a week, or £8,756.80 a year - a boost of £634.40.
- Find out more:how much state pension will I get?
Is the ‘triple lock’ at risk?
In the 2022-23 tax year, the 'triple lock' was reduced to a 'double lock' to address a quirk in wage growth following the Covid-19 pandemic.
In August, Rishi Sunak told ITV the government was committed to its policy on the triple lock, but after record earnings figures were revealed on Tuesday 12 September there have been rumours the government will tinker with the calculation again.
The table below shows how the triple lock has boosted the state pension since it was introduced.
| Year | CPI | Average earnings | 2.5% | Which part of the triple lock kicked in? |
|---|---|---|---|---|
| April 2012 | 5.2% | 2.7% | 2.5% | CPI Inflation |
| April 2013 | 2.2% | 1.5% | 2.5% | Guaranteed minimum |
| April 2014 | 2.7% | 1.2% | 2.5% | CPI Inflation |
| April 2015 | 1.2% | 0.6% | 2.5% | Guaranteed minimum |
| April 2016 | -0.1% | 2.9% | 2.5% | Average earnings |
| April 2017 | 1% | 2.5% | 2.5% | Guaranteed minimum |
| April 2018 | 3% | 2.3% | 2.5% | CPI Inflation |
*Triple lock suspended
- Find out more:how do I qualify for state pension?
What this means for your tax bill
The downside of a more generous state pension increase is that more pensioners may have to pay tax on their overall income in the coming years.
This is because the personal tax threshold is due to remain at £12,570 until 2028.
Currently, the 2023-24 full rate of the new state pension takes up all but £1,970 of the personal tax allowance (£12,570 minus £10,600 pension).
If the state pension rose by 8.5%, this would leave just £1,068 of a pensioner's personal tax allowance (£12,570 minus £11,502 pension).
This means even those with a modest private income will be tipped into paying the basic rate of tax at 20%.
- Find out more: state pension income tax warning - will you need to pay?
How to check your state pension forecast
The state pension is paid when you've reached state pension age. This is currently age 66 for women and men, but it's due to increase in the coming years.
The amount you get depends on how many National Insurance Contributions (NICs) you've made during your working life.
You'll need at least 35 qualifying years of contributions to qualify for the full new state pension, and at least 10 years' worth to get anything at all.
You can use the government tool to check your state pension forecast, which will tell you how much you can get, when you can start receiving payments and whether you're able to increase them.
If you reached the state pension age before April 2016, you'll need 30 years of contributions to get the full basic state pension.
- Find out more:your state pension forecast explained
