Much has been written recently on the increase that will apply to the State Pension from April 2026. In this regard, there are two pensions to consider:
1. The basic State Pension (bSP) for those who reached State Pension age before April 2016; and
2. The new State Pension (nSP) for those who reached State Pension age after April 2016
Whilst there is no legislative requirement to increase the State Pension according to the Triple Lock, ahead of the 2024 General Election, the Labour Party made a Manifesto pledge (on page 79) that it would be retained. The Triple Lock means that the bSP and nSP will increase by the higher of:
- Earnings inflation;
- Price inflation (measured by the Consumer Prices Index (CPI)); or
- 2.5%
So, in order to ascertain the increase that will apply from April 2026, we need to look at these three values:
Earnings Inflation
There is no statutory definition of earnings inflation only that the Secretary of State ‘shall estimate the general level of earnings in such manner as he sees fit.’ Convention has indicated the Government compared the Nominal Average Weekly Earnings (AWE) from the Office for National Statistics (ONS) for the three months to July in one year and compared it to the following year (i.e. for the rates in 2026, looking at May to July 2024 compared to May to July 2025).
On 16 September 2025, the ONS published this information showing that average weekly earnings increased by 4.7%, i.e. the increase between May to July 2025 was 4.7% higher than the comparable quarter the year before.
This 4.7% value has been used by many to predict that this will be the inflationary value applied to uplift State Pensions in April 2026. However, we need to consider the other values.
Price Inflation
On 17 September 2025, the ONS published the CPI rate for August 2025, i.e. 3.8% is the increase in costs in the 12 months to August 2025. Note we are looking at the CPI rate, not CPIH (the Consumer Prices Index including owner occupiers' housing costs) or Core CPI (the Consumer Prices Index excluding energy, food, alcohol and tobacco).
We are looking for the CPI rate in the year to September 2025 and this value is set to be published on 22 October 2025.
We do not have this value now.
2.5%
We have this value.
For Bookkeepers
Personally and professionally, the value of the State Pension is important. However, if we need three values and only have two, nobody can make an accurate prediction. We need to be looking for one value to complete the picture:
1. CPI inflation for the 12 months to September 2025 – due for publication in October 2025
The value of the State Pension increase will be confirmed at this year’s next ‘fiscal event’ which is the UK Budget on 26 November 2025.
