State pensioners could be in for a 3.9 per cent rise next year (Image: Getty)
State Pensioners are poised to receive a larger increase next April than thought earlier this year, as new earning figures were confirmed today. BBC Radio 4 Moneybox expert Paul Lewis said the new figures could mean a 3.9% increase – meaning people could get a rise of £9.40 a week to £250.70 – £13,036 a year – on the new state pension.
He explained the key date when pensioners will find out exactly what they’ll get is October 20 – when the figures are revised. Job vacancies have fallen to a fresh five-year low as small firms continue to hold back from hiring amid soaring wage costs, according to official figures.
The Office for National Statistics (ONS) said there were around 8,000 fewer vacancies quarter on quarter in the three months to August, at 702,000, which remains the lowest since spring 2021, or, outside the Covid pandemic years, for over a decade.
Small firms are flagging ongoing pressures from rising wage bills as a factor holding them back from taking on staff, according to the ONS. The data showed regular average weekly earnings growth remained unchanged at 3.5% in the three months to July, while it continues to outstrip inflation, rising by 0.8% with the Consumer Prices Index taken into account.
Total wage growth stood at 3.9%, down from 4.2% in the three months to June. This is a key figure for the pensions triple lock calculation and puts pensioners on course for a 3.9% uplift in the state pension next year, according to experts. Annual growth in employees’ average earnings was 3.8% for regular earnings in March 2026.
Mr Lewis said: “State pension set to rise by around 3.9% to just over £13,000/year (new state pension) and almost £10,000 (old state pension) after wage data for May-July published. It is subject to revision on 20 Oct and if inflation announced 21 Oct is higher that rise will be used instead.
“The expected rise in state pension is nothing to do with triple lock. The law says it will rise by wages unless Sec of State decides differently. Triple lock policy (not law) is that they will if inflation or 2.5% is higher than wage rises. That is unlikely this time.
“If state pension rises by 3.9% (that stays unrevised in October and September inflation not more than that) standard new state pension will rise £9.40 a week to £250.70 (£13,036/yr); basic old state pension (which most get) will rise £7.20 to £192.10 a week (£9989/yr).
The UK unemployment rate also remained unchanged at 4.9% in the three months to July, but more timely data estimates that workers on payrolls slumped by 26,000 during August to 30.2 million, following a 19,000 drop in July.
While the latest figures are subject to revision, the August drop is the largest payroll decline since November last year. Liz McKeown, ONS director of economic statistics, said: “Payrolled employee numbers continue to edge down, with falls over the past year particularly evident in the retail and hospitality sectors.
“Vacancies remain at their lowest level outside the pandemic period for more than a decade, with smaller businesses continuing to report that increased labour costs are affecting hiring decisions.”
The figures come ahead of the interest rate decision on Thursday, with Bank of England policymakers expected to vote to hold at 3.75%.
Thomas Pugh, chief economist at RSM UK, said that despite ongoing weakness, the statistics show signs of stabilisation in the jobs market, which may give the Bank room to increase rates to combat inflation in the coming months.
One final state pension post. It is the standard and basic rates that rise with the triple lock ie probably 3.9% from April. Other bits for deferring, SERPS, protected pension etc – will rise by Sept inflation figure published 21 October (not tomorrow) so overall rise for most…
— Paul Lewis (@paullewismoney) September 15, 2026
Official inflation data on Wednesday will be watched closely by the Bank as fears mount that soaring oil and energy prices caused by the Iran war will send the cost of living racing higher over the next few months.
Private sector wage growth stood unchanged at 2.9% in the latest ONS figures and remained at six-year lows, but there are concerns that earnings will creep up again as wider inflation builds.
Mr Pugh said: “The Monetary Policy Committee (MPC) has so far relied on the weakness of the labour market as cover for keeping rates on hold, but that position looks increasingly difficult to hold if the labour market stabilises and inflation rises to around 4%.
“We still expect the MPC to hold rates on Thursday, but a rate hike as early as November is now looking much more likely.”
Pantheon Macroeconomic experts now expect the Bank to raise rates in November and next February, as it said attentions are turning to “whether a loosening labour market can offset what surging energy costs will eventually do to wage growth and inflation”.
Work and Pensions Secretary Pat McFadden said the ONS figures “show a labour market that remains resilient in the face of significant global economic pressures”.
“But we know there is more work to do, particularly to ensure young people gain the skills, experience and confidence needed to succeed,” he added.
