Millions of retirees will get a pay rise in April when the weekly State Pension will increase by around £11. The Department for Work and Pensions has confirmed the proposed rates for the 2026/27 financial year, which will come into effect on April 6.

People on the New State Pension are set to receive £241.30 per week, an increase of more than £11 from the current financial year, when it is £230.25. However, those who reached State Pension age before April 6, 2016, will receive the maximum basic State Pension. This will also increase by 4.8% to £184.90, up from £176.45 at present.

It is worth noting that to receive the full amounts, pensioners will need to have sufficient qualifying years of National Insurance contributions.

The Government had to propose an increase in payments due to its triple lock guarantee, which aims to ensure pensioners have enough money to live on.

The system guarantees the pension payments will increase by either inflation, wage increases or 2.5% – whichever is highest. In 2025, earnings growth was the highest measure at 4.8%, while the CPI rate was 3.8%.

However, there is concern that the triple lock promise will drag millions of retirees into paying tax on their pensions. The annual value of a New State Pension will rise by around £574 to £12,547, just pounds away from the tax-free threshold.

But Rachel Reeves announced that Labour will freeze the threshold of £12,570 for another three years until April 2031. In the Autumn 2024 Budget, Reeves had promised it would only be frozen until the 2027/28 tax year.

If inflation or wage earnings continue at the same rate, it will not be long before the pension is pushed above £12,570, leaving thousands in tax-paying territory.

Government said the move would produce billions for the economy. The OBR estimated that a freeze between 2022/23 to 2030/31 will raise an extra £55.5 billion by 2030/31.

It forecast that an additional 5.2million individuals would be plunged into paying income tax, and 4.8million would end up paying the higher rate in 2030/31.

The UK Government recently confirmed that HMRC will introduce measures to ensure pensioners who solely rely on the State Pension for income will not need to complete a Simple Self Assessment tax return, if it rises past £12,570.