Updates from the Autumn Budget 2025

The government announced its Autumn Budget on 26 November 2025. These are some key messages that relate to pensions:

The State Pension triple lock remains in place 

• The triple lock guarantees the State Pension rises each year by the highest of three measures: inflation, average wage growth or a minimum of 2.5%. 

• The basic and new State Pension will increase by 4.8% from April 2026 in line with average earnings growth which was the highest of the triple lock measures. 

• If you are receiving the full new State Pension (taken after 6 April 2016), the weekly amount will increase from roughly £230.25 to about £241.30. 

• If you are receiving the older basic State Pension (taken before 6 April 2016), the weekly amount will rise from roughly £176.45 to £184.90. 

• You can learn more about the State Pension on the government website.

Personal Allowance and income tax thresholds remain frozen 

• The amount of income you can earn before paying income tax (known as the Personal Allowance) is set to remain frozen at £12,570 until at least 2030/31. 

• This could mean that earners and pensioners could start to pay or pay more tax as earnings and pensions increase over time. 

• The other income tax bands are also set to remain at their current levels which means more people could be pushed into the higher-rate tax bands. 

New National Insurance (NI) cap on salary-exchanged pension contributions 

• This change could impact active RWE Group members who are contributing via salary exchange.

• Salary exchange (also known as salary sacrifice) is where you agree to give up part of your salary in exchange for your employer paying the same amount directly into your pension.

• It can be a tax-efficient way to contribute as the exchanged salary is usually exempt from income tax and National Insurance, potentially increasing your overall pension contributions.

• From April 2029, pension savers will pay NI on pension salary exchange above £2,000 a year. This means members contributing over this amount by salary exchange may see smaller NI advantages.

• You can learn more about how salary exchange works on the MoneyHelper website.