£500 State Pension Rise Comes With a Tax Sting as Full Rate Heads Above £12,570

The full new state pension could rise above £13,000 next April, pushing it beyond the frozen £12,570 income tax threshold. (Credit: Pexels/SHVETS production)

Millions of pensioners are on course to receive a state pension increase of approximately £500 next year, but the rise could also push the full payment above the frozen income tax threshold.

Average earnings grew by 4.1% in the three months to June, placing wages ahead of the current inflation rate and the triple lock's minimum 2.5% guarantee. If that figure determines the April 2027 increase, the full new state pension would rise from £241.30 to approximately £251.20 a week.