Retirees could receive a fresh windfall on their state pension as the Middle East conflict threatens to push up inflation again.

Rising oil and gas prices linked to the war involving Iran could send inflation above 3% by the end of the year if energy costs remain elevated. Under the Government’s “triple lock” guarantee, the state pension increases each April by whichever is highest of inflation, wage growth or 2.5%. But analysts say a surge in inflation can trigger a “double boost” for pensioners because rising prices are often followed by stronger wage growth a year later – meaning the formula can effectively reward the same inflation spike twice.

It means today’s geopolitical turmoil could eventually feed through into higher pension payments in successive years.

Millions of retirees are already set for a 4.8% rise in April, taking the full new state pension to £12,547.60 a year.

Annual increases are based on September’s inflation figure or average wage growth between May and July, whichever is higher.

Inflation shocks can trigger back-to-back rises

A similar pattern followed Russia’s invasion of Ukraine in 2022, which sent energy prices soaring across Europe. State pensioners received a record 10.1% increase in 2023, reflecting the previous year’s inflation surge.

This was followed by a further 8.4% rise in 2024, based on strong wage growth, even though inflation had already fallen to 6.7%. Economists say the same dynamic could now play out again if the current conflict keeps energy costs high.

Ezra Cohen, of the Centre for British Progress think tank, said the triple lock had played an important role in improving pensioner incomes but contained a structural weakness.

He said: “[The triple lock] is guaranteed to ‘double count’ price increases, because a spike in inflation in one year typically leads to an increase in wages the next.

“As a result, even a brief rise in prices will boost pensions twice over, making the triple lock volatile and increasingly unsustainable. The Iran war could well see this play out again.”

Growing cost to taxpayers

Critics argue that the formula is steadily pushing up the cost of the state pension for taxpayers.

Official projections suggest the annual bill will climb to £171.7bn by 2029-30, up from £136.6bn in 2024-25, driven by both the triple lock and Britain’s ageing population.

Adam Cole, of wealth management firm Quilter, said pensioners would welcome any increase but warned of the longer-term consequences for the public finances.

He told the Telegraph: “The triple lock was designed to repair decades of relative decline in the state pension, but it now operates as a ratchet that locks in temporary shocks. We saw the pattern after Ukraine, and the same dynamic could emerge again.”

War drives up energy prices

Chancellor Rachel Reeves has already warned households to brace for renewed inflation pressures linked to the conflict.

Oil prices surged to around $100 a barrel this week following Iranian attacks on energy infrastructure and the effective closure of the Strait of Hormuz, one of the world’s most important shipping routes for oil.

Headline inflation is currently running at around 3%, down from a peak of 3.8% last year. Before the latest escalation in the Middle East, economists had expected inflation to fall closer to the Bank of England’s 2% target during 2026.

But if energy costs remain elevated, analysts say the squeeze on household budgets – and the knock-on impact on state pension increases – could last for years.