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The state pension could rise by just over \u00a3500 a year next April, taking it above the tax-free personal allowance after figures showed earnings grew by an annual rate of 4.1%.<\/p>\n
Under the triple lock, the state pension increases each year by the highest of average earnings growth, Consumer Prices Index inflation or 2.5%.<\/p>\n
Inflation is currently at 2.6% and while the Bank of England forecasts it will rise to around 3.2% this year, it is being outpaced by wages.<\/p>\n
There will be one further month\u2019s data to fix next year\u2019s pensions rise. If there is no change, a 4.1% increase would add \u00a39.90 per week to the new state pension, taking it from \u00a3241.30 to \u00a3251.20 \u2013 an increase of just over \u00a3500 a year.<\/p>\n
That would take it from just below the \u00a312,570 threshold to about \u00a3500 above.<\/p>\n
Pressure is now on ministers to explain how they will fulfil a pledge not tax those wholly dependent on the state pension.<\/p>\n
LCP partner and former pensions minister, Steve Webb, said that it was good to see pensions rising, but the tax implications are the \u201csting in the tail\u201d.<\/p>\n
He added: \u201cWe therefore urgently need to know how the government plans to fulfil its pledge to make sure that those wholly dependent on the new state pension will not be charged income tax next year.\u201d<\/p>\n
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