What is the state’s triple pension system and how does it work?

Millions of public sector pensioners are set to receive a pay rise of more than £460 next year thanks to the ‘triple lock’ policy.

Although the final figure will be confirmed by Work and Pensions Secretary Liz Kendall before the Budget on 30 October, it is almost certain that the state pension will rise by 4% – the same amount as the average wage, according to figures from the Office for National Statistics.

The new full state pension will reach almost £12,000 for the first time, with the change taking effect on 7 April 2025. The ‘basic’ state pension, paid to those who reached state pension age before 2016, is also set to rise by around £353 to £9,167 a year.

But the pay rise represents a huge cost to the government, and questions have been raised about whether it could be changed or scrapped altogether. As political pressure mounts to rein in public finances, the triple lock on state pensions has become a key topic of debate.

Here, Telegraph Money explains what the triple lock is and how much pensioners will receive from the state pension this year, covering the following points:

The State Pension is a regular payment from the government to support people throughout their retirement. It can only be claimed when you reach state pension age, which is currently 66 for both men and women. However, this age will gradually increase to 67 from 2026.

You must also have sufficient years of qualifying National Insurance contributions.

If next year’s increase in the state pension follows today’s wage figures, pensioners receiving the new full state pension will see their payments rise to £11,962.60 in the 2025-26 tax year, up from £11,502.40 in 2023-24. This applies to people who reached state pension age after April 2016 and have 35 years of National Insurance contributions.

The basic state pension, paid to those who reached state pension age before April 2016, will rise to around £9,167, an increase of £353.

The triple lock policy was first introduced by the coalition government in its 2010 budget and came into effect in 2011-12.

He promises to increase the state pension every April, based either on inflation (CPI) in the previous September or wage growth, or by 2.5%, whichever is higher.

For 2025-26, the increase will almost certainly be in line with wage growth, at 4%, as it will probably be above inflation, at 2.5%.

For 2024-25, pensioners have been given a one-off pay rise of 8.5%, the second largest on record, with the triple lock reflecting the increase in wages.

Pensioners receiving the full new state pension will receive £11,502.40 in the 2024-25 tax year, up from £10,600.20 in 2023-24.

Those receiving the basic state pension will receive £8,814 this year.

The table below shows how the triple lock has led to an increase in state pension payments since 2011-12.