State pensioners in Britain could be in line for a windfall despite the consumer price index (CPI) rate of inflation rising earlier this summer, according to analysts.
In the 12 months to June 2025, inflation jumped to a higher-than-expected 3.6 per cent, figures from the Office for National Statistics (ONS) found.
Recently, the Bank of England has raised interest rates in years in effort to bring the CPI rate down to its desired two per cent target, however the Bank has begun to bring the cost of borrowing down over the past 12 months.
Last week, the central bank's Monetary Policy Committee (MPC) slashed the base rate to four per cent but warned the CPI inflation rate is likely to peak at four per cent in September.
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State pensioners are in line for a windfall despite inflation rising in a blow to millions
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Thanks to the triple lock, state pension payment rates rise annually by the highest of three possible metrics, including CPI inflation, average earnings or 2.5 per cent.
Notably, the CPI rate for the 12 months to September is the figure used if inflation comes in higher than 2.5 per cent and average wages.
The Government uses average earnings growth figures for May to July each year under the triple lock payment mechanism, which have yet to be published.
However, the previous figure for March to May 2025 came to five per cent, excluding bonuses, with the next quarter's rate likely to come around to a similar rate.
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How much will the state pension triple lock cost the British taxpayer? | OBR Despite this, analysts note the Bank of England's four per cent CPI inflation projection offers pensioners a "favourably timed spike" if average wage growth comes in lower-than expected.
Laith Khalaf, the head of investment analysis at AJ Bell, explained: "Pensioners have something to cheer in the latest set of forecasts from the Bank of England, which predict inflation will peak at 4% in September.
"That’s a favourably timed spike for the calculation of next year’s state pension, which takes the September CPI reading as one of the inputs of the triple lock.
“It’s possible that wage growth may trump inflation, and pensioners get an even bigger bump in their income.
"But if the Bank of England is right about inflation, then pensioners can look forward to a rise of at least four per cent in their state pension next year.
"No doubt this will once again raise questions about the fairness of the triple lock, especially against a fiscal backdrop which suggests the Chancellor is going to have to stick a shovel into taxpayers’ pockets again in the autumn Budget."
As it stands, the full, new state pension offers claimants £230.25 per week which comes to £11,973 a year. If a four per cent rate hike is implemented, this would comes to £239.46 weekly or £12,452 annually.
Similarly, for those in receipt of the full, basic state pension, a four per cent inflation boost would see a £9,180 annual payment jump to £9,542.50 a year.
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What has the impact of the state pension triple lock been on the public's finances | OBR Overall, new and basic state pension claimants would receive annual payment rate increases of £479 and £362.50, respectively.
On the overall economy, Khalaf added: "The Bank of England thinks inflationary risks have picked up in recent months and as a result the gradual and careful approach to interest rate cuts still prevails.
"But the fact there are so many hawks on the rate-setting committee will give markets pause for thought on how quickly interest rates will descend from here.
"That said, based on current interest rate expectations, CPI is still forecast to fall to two per cent in the medium term, which provides some reassurance to the market that its existing pricing isn’t too wide of the mark."