The state pension is set for another significant increase in April 2026, thanks to the triple lock—the government’s guarantee that pensions will rise by the highest of inflation, average earnings growth, or 2.5%. With the latest ONS data showing a 4.7% rise in average earnings between May and July 2025, pensioners are likely to see their payments increase by the same percentage. 

This uplift would take the ‘new’ state pension to around £12,534.60 per year, just £35 shy of the current basic income tax threshold of £12,570, which has been frozen until at least 2028. While a rise in pension income sounds positive, it brings an unexpected issue—many retirees could now be nudged into the tax net for the first time. 

According to financial experts, this situation creates what’s being dubbed a “tax trap” for pensioners. Any additional income from private pensions, savings interest, or taxable benefits could easily push them over the threshold. With around 8.5 million pensioners already paying income tax, up from 7.8 million last year, the number is expected to keep rising unless the government takes action. 

The situation also raises broader concerns about the sustainability of the triple lock. Although politically popular, critics argue that it is becoming increasingly expensive and distorts long-term fiscal planning. The Office for Budget Responsibility (OBR) has forecast that the state pension budget will balloon to £182 billion by 2029–30, putting more pressure on public finances. 

There’s also a political dilemma for the Treasury. Removing the freeze on personal allowances would cost billions, while adjusting the triple lock could prove highly unpopular among pension-age voters. With Chancellor Rachel Reeves yet to address the issue, pensioners and tax advisors alike will be watching closely ahead of next year’s Budget announcements.