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Retirees collecting the new government pension as of April are likely an annual boost topping £500, according to the latest earnings statistics.

Due to the “triple lock” policy, the retirement payment rises each year by the largest of three figures: 2.5%, inflation, or pay rises.

Recent numbers indicate that wage growth with bonuses for the three months to July reached 4.7%, making it the figure applied for the next pension increase.

Nearly 13 million retirees presently receive the state pension.

The new earnings figure suggests the projected adjustments:

• The new government pension—for those who qualified for state pension age following April 2016—may rise to £241.05 per week. This will take the yearly total to £12,534.60, an increase of £561.60 compared to today’s values.
• The old state pension—applicable to those who reached retirement age prior to April 2016—is expected go up to £184.75 per week. That will take the yearly amount to £9,607, an increase of £431.60 relative to today’s levels.

An analyst pointed out that the base amount of the new retirement benefit is “inching increasingly near to the frozen income tax threshold”, which currently remains at £12,570.

The basic allowance is the sum of income an individual can receive every year before owing tax.

It is projected that someone with zero further earnings except the current retirement benefit may start a income tax payer by April 2027.

Already, almost three quarters of all pensioners owe income tax, and the current hold in tax brackets coupled with regular rises in the pension will bring an increasing number under the tax system.

Not all pensioners qualify for the complete amount, because it is based on length of eligible contributions via the state insurance scheme.

Among many retired people, the state pension is only one part of their exclusive form of revenue, because they will also receive payments from occupational or personal pensions.

The state pension is the second biggest expense in the public budget, behind healthcare costs.

This earnings-linked policy was originally created to make sure that the worth of the government pension would not fall behind rises in the living expenses or the incomes of working people.

However, there has been intense controversy about the cost of the system and if it can be justified.

During July, the national budget office stated that the financial burden of the earnings-linked system projected to be triple by the end of the ten-year period than had been anticipated when it was introduced.