The State Pension is set to rise by 4.8% in April - higher than the 4.7% predicted only a month ago - due to the Triple Lock mechanism, according to a forecast from former Pensions Minister Sir Steve Webb.

Sir Steve believes the recent higher-than-expected rise in average earnings will push up the Triple Lock-based payment, resulting in millions receiving a higher State Pension.

New figures from ONS published today (14 October) reveal that average earnings growth in the year to May-July was 4.8% compared to the 4.7% estimated a month ago. 

Sir Steve says the figure is likely to exceed both inflation and the 2.5% floor of the ‘Triple Lock’ formula, this means that the state pension is set to rise by the average earnings growth of 4.8% next April.

The figures have not been confirmed by the government.

If Sir Steve is correct, it means the State Pension will rise by £11.05 to £241.30 a week (compared to £230.25 previously predicted) and the Basic State Pension will go up to £184.90 (compared to £176.45 previously predicted).

The 4.8% increase would keep the State Pension below the income tax threshold for one more year but it would go above the threshold the following year meaning that, unless rules are changed, the State Pension would be subject to income tax.

The table below shows the rates this year and next of the old ‘basic’ state pension and the ‘new’ state pension, the two elements of the system covered by the Triple Lock. 

Source: Sir Steve Webb / LCP 

For pensioners who receive ‘additional state pension’ (SERPS or State Second Pension) on top of their basic pension, this additional element will be increased in line with the CPI figure for the year to September which has yet to be published, Sir Steve said.

Sir Steve, a partner at pension consultants LCP, said: “We can now be pretty certain that the new State Pension and the Basic State Pension will rise by 4.8%. This will keep the headline rate of the State Pension below the income tax threshold for one more year, but it will go above the tax threshold in 2027 if allowances do not rise”. 

• Latest ONS figures for average earnings are at: Average weekly earnings in Great Britain - Office for National Statistics