UK State Pension Set to Rise Above £13,000 as Wage Growth Slows to 3.9%
Slower wage growth feeds into the triple-lock formula, pushing the state pension past the income tax threshold, while new labour market data shows continued weakness in payroll employment.
The UK state pension is on track to rise to around £13,000 next year after wage growth, one of the measures used to calculate the annual triple-lock increase, slowed to 3.9%, according to figures cited in a Guardian business live report on September 15, 2026.
The triple lock guarantees that the state pension rises each year in line with whichever is highest: average earnings growth, inflation, or 2.5%. With wage growth data now pointing to a 3.9% uplift, the state pension is expected to breach the current £13,000 threshold for the first time.
Such an increase would likely push the pension above the UK's tax-free personal allowance, which currently stands at £12,570 — the amount an individual can earn before becoming liable for income tax. The government confirmed in the 2025 Budget that the personal allowance will remain frozen at that level until April 2031, according to the report.
The freeze means that, absent other income, pensioners receiving only the state pension could find their payments exceeding the tax-free threshold. However, the government also announced in the same Budget that pensioners whose sole income is the basic or new state pension will not be required to pay small amounts of tax through simple assessment from the 2027/28 tax year onward, if the pension exceeds the personal allowance at that point. The report notes that the government has not yet published further details on how this exemption will be implemented.
Separately, the same live coverage reported on the latest UK labour market data, describing conditions as "subdued." Unemployment was little changed over the summer months, but payroll employment and job vacancies continued to decline, the report said.
Payroll employment fell by 26,000 in August, according to the figures, while the previously reported 13,000 decline for July was revised to show a larger fall. The data also indicated a divergence between the public and private sectors: private-sector employment fell, leaving it almost 141,000 lower than at the start of the year, while public-sector headcount rose by almost 36,000 over the same period, according to the report.
Sources
- Pensioners are ‘big winners’ with triple-lock set to rise by 3.9%, lifting state pension to £13,000 – business live — The Guardian — Business
EGazette summarizes reporting from multiple sources; follow the links for the originals.
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