Pensions - Articles - Latest earnings figures set minimum for state pension rise

 The Office for National Statistics has announced that the average weekly earnings (including bonuses) annual growth rate for May to July 2025 stood at 4.7%.

 This sets the minimum increase to the state pension for 2026/27, impacting millions of state pensioners, with the final figure depending on whether September’s inflation figure is above or below this.

 Steven Cameron, Pensions Director at Aegon UK, comments: “Today’s announcement that year-on-year earnings growth for May to July stands at 4.7% is the greatest indication yet of the increase state pensioners may receive next April. Each April, the state pension increases in line with the triple lock – whichever is highest out of earnings growth for the preceding May to July period, consumer inflation in the preceding September, or a fixed minimum of 2.5%.

 “Given that we now know earnings growth at 4.7% is higher than the 2.5% minimum, all eyes turn towards September’s inflation rate, which should be announced on 22nd October. Inflation has been increasing, albeit gradually, over the past few months, most recently standing at 3.8%. In August, the Bank of England predicted inflation would peak in September at 4%. Therefore, inflation would have to rise sharply to exceed the earnings figure. 

 “When earnings growth exceeds inflation, pensioners receive an increase based on earnings which is good news for them as it improves their purchasing power. If inflation exceeds earnings growth, this determines the triple lock increase, and purchasing power is protected, albeit not improved.”