UK state pension set to pass £13,000 — and overtake the tax-free allowance for the first time

The ONS has published wage figures for May to July 2026. Average earnings including bonuses rose 3.9% over the year — the weakest reading since autumn 2020. It sounds like a dry statistic, but it is the number that starts the state pension recalculation: under the triple lock, the full new State Pension is on course to rise from £241.30 to about £250.70 a week from April 2027. That is £13,037 a year against today's £12,548 — an increase of nearly £490.

And it creates something Britain has not seen before. The tax-free Personal Allowance is frozen at £12,570, and the full state pension now overtakes it. A pensioner with no income at all beyond the state pension becomes a taxpayer for the first time.

Where does the 3.9% come from?

From the ONS bulletin Average weekly earnings in Great Britain, released on 15 September. For May to July 2026, average earnings including bonuses rose 3.9% year on year; excluding bonuses, 3.5%. In cash terms that is £756 a week including bonuses and £705 excluding them as of July.

The 3.9% is down from 4.2% in the previous three-month period. It was last lower in September to November 2020, when it was 3.7%.

The average hides a gap worth knowing if you are choosing where to work. Public sector regular pay grew 6.3%; private sector, 2.9% — the weakest since autumn 2020. The public sector figure is inflated by a technical effect: some NHS pay awards were paid earlier in 2026 than in 2025, flattering the comparison.

By industry, wholesaling, retailing, hotels and restaurants led at 3.1%. Construction was slowest at 0.3%. Manufacturing came in at 2.9%, finance and business services at 2.7%.

What is the triple lock, and why is this not the deciding number?

The triple lock is the rule for uprating the state pension. It rises by the highest of three things: growth in average total earnings for May to July, September CPI inflation, or 2.5%.

The first is now known: 3.9%. The second is not. September inflation is published by the ONS on 21 October at 07:00. If it comes in above 3.9%, the pension rises by that instead and the increase is larger. If below, the earnings figure wins. So 3.9% today is a floor, not a final answer.

The interim marker is now in. August inflation came in at 3.1%, against 2.9% in July and 2.6% in June — a third consecutive rise. That leaves 0.8 percentage points to 3.9%, and the acceleration came from fuel. If September keeps moving, the earnings figure may yet lose.

How much tax would a pensioner actually pay?

Using 3.9%, the floor case.

The full new State Pension is £241.30 a week — £12,547.60 a year. That is £22.40 below the £12,570 Personal Allowance, so there is no tax today.

From April 2027, uprated by 3.9%, it becomes £250.71 a week — £13,036.92 a year. The excess over the allowance is £466.92. Tax at the 20% basic rate is roughly £93 a year.

The old basic State Pension (men born before 6 April 1951, women before 6 April 1953) is £184.90 a week. Uprated by 3.9% that is about £192.10 a week, £9,989 a year — comfortably below the allowance, so its recipients are untouched if they have no other income.

One caveat: the Personal Allowance is frozen at £12,570 until April 2028. The Chancellor could unfreeze it, or create a separate concession for pensioners, at the Autumn Budget on 28 October. No such decision exists yet.

Does this matter if I only recently moved to the UK?

It matters in two ways, and both are about now rather than retirement.

First, to get any state pension you need at least 10 qualifying years of National Insurance, and 35 for the full amount. Years build while you work and pay contributions, and in some non-working situations too — caring for a child under 12, for example. Check your record through the State Pension forecast on gov.uk, which also shows which years are empty and what it costs to fill them.

Second, 3.9% with bonuses and 3.5% without is the benchmark to bring to a pay conversation. If your employer is offering less than 3.5%, you are falling behind the market. Inflation over the same period averaged 3.0% on CPIH, so real pay growth across the country is a modest 0.6%.

What should you do before April 2027?

Check your State Pension forecast on gov.uk and see how many qualifying years you have. If the record has gaps, buying missing years is often worth it — a week of pension now costs more than the contribution that buys it.

If the state pension will not be your only income — and for most people it will not — the £93 is just the tip: everything above £12,570 is taxable, including a workplace pension and savings interest above your Personal Savings Allowance.

And put two dates in the diary: 21 October, when September inflation lands and the final uprating percentage is known, and 28 October, the Autumn Budget, where the Chancellor could move the allowance.

All the upcoming financial deadlines are collected in the ONLYWAY calendar, day by day, with explanations.

One more way to build years while at home with a child: a Child Benefit claim gives National Insurance credits automatically until the child turns twelve.

Read also: The UK State Pension: how much, who qualifies, how it is calculated · Autumn Budget set for 28 October