Wage growth continues to outstrip inflation, so it’s highly likely that this will be the key factor used to uprate the state pension under the triple lock.

The triple lock aims to increase the state pension every year by whichever is highest of CPI inflation, average wages or 2.5%.

The latest figure for average wages including bonuses for the April to June 2024 period came in at 4.5%. This is much lower than last month’s 5.7%, but it has been affected by the payment of one-off bonuses in the NHS in June last year.

The important wages figure that will affect the triple lock is the one covering the May to July 2024 period which will be published next month.

In a blow to pensioners the effect of these one-off bonuses will continue to linger and this will dampen the wage growth figure. This means they will receive a lower increase to their state pension than they otherwise would have done.

Read more: What to do if you've paid too much tax on your pension

If the figures were to remain the same next month, then we could see the full new state pension get a boost of around £517 — taking it to around £12,019 per year from next April.

Such a rise will be welcomed by pensioners still emerging from the cost of living crisis. However, with many still reeling from the recent news that their winter fuel payment is to be taken away, it won’t be quite the boost that many hoped for.

There’s another looming challenge — frozen tax thresholds mean that the full new state pension is creeping ever closer to tax paying territory and a similar rise next year could see it surpass it.

It could also prove an issue for those on the basic rate pension who may have extra income from the state second pension which leaves them close to the threshold. With these freezes in place until 2028, there’s every chance, we could see pensioners solely reliant on the state pension finding part of it is making its way to the taxman before too long.

The state pension forms the backbone of people’s retirement income but if you want a decent retirement income it is vital that you supplement it with your own retirement saving whether that be through a workplace pension or SIPP.

Read more: How much do you need to save for retirement?

The latest data from Hargreaves Lansdown’s Savings and Resilience Barometer shows that only 38% of households are currently on track to receive a moderate income in retirement so it is clear there is still much to be done.

Taking small actions such as increasing your contributions every time you get a pay rise or new job is one way to boost your contributions and you should also make sure you are making the most of any contributions your employer is able to make.

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