The wage growth figures out today mean that the state pension is likely to rise by 3.9% next year. This was reported by Qazaqyia.kz citing The Guardian.
That is because, under the triple lock, the state pension rises in line with earnings, prices or 2.5%, whichever is higher. Today's figures are the ones for the earnings benchmark, and it is unlikely that the relevant inflation figure will be higher when it comes out. So next year the state pension should rise in line with earnings – by 3.9%.
As a result, pensioners should get an increase of £488 next year, taking the annual payment over £13,000. That means they will be above the £12,570 tax-free personal allowance.
Rachel Reeves anticipated this when she was chancellor and, in her budget last year, which confirmed a freeze in the personal allowance, she said that anyone who receives the state pension but no other income will not have to pay income tax before 2030.
In interviews this morning, Jonathan Reynolds, the business secretary, repeatedly refused to confirm that the government would commit to this promise. He just said it was a matter for the chancellor.
At the Downing Street lobby briefing this morning, No 10 said the Reeves promise still held.
"In line with the commitment made at the budget in 2025, pensioners who only just [exceed] the personal allowance will not have the administrative burden of paying small amounts of tax in this parliament," the No 10 spokesperson said.
"The chancellor will set out further details on how that commitment will be delivered at the budget shortly."
"And work is already underway to ensure anyone whose only income is the full new or basic state pension, without any increments, will not pay income tax in this parliament. We'll set out further details in due course."
The spokesperson did not say how the Treasury would decide if pensioners "only just" passed the income tax threshold.
Asked if this pledge would only apply to people relying entirely on the state pension, or whether it might include pensioners with a small private pension income, the spokesperson just said further details would be issued in due course.