Pensioners could be in for another big rise in income if wages continue growing growth at current levels.

The annual rise in the state pension is determined by the triple lock under which it rises each April in line with whichever of three measures is highest in the previous September: a flat rate of 2.5%, the rate of inflation or the average increase in wages.

Currently wages are growing at 5.7% and it that remains unchanged it would be the chosen rate to increase the pension. The full new state pension would rise to more than £12,100 per year from April next year.

Although not as high as the increases in the past two years, the extra cash will make a sizeable difference to people’s day-to-day spending.

Helen Morrissey, head of retirement analysis, Hargreaves Lansdown said: “Inflation may be on the wane but wage growth remains red hot coming in at 5.7%

“This makes it highly likely that wage growth will be used to uprate the state pension from April next year – the figure to watch will be published in September. If it remains at a similar level, we would see the full new state pension rise to more than £12,100 per year.

“Such a rise would be welcomed by pensioners who have been buffeted by the cost-of-living crisis. It may not be on the scale of increases given in the past, but it will still make a sizeable difference to people’s day-to-day spending.

“It remains to be seen if state pension will form part of the government’s pension review. With a burgeoning pensioner population, the state pension costs are rising, and the government will want to manage this and there is only so far, they can go when it comes to raising state pension age.

“An overarching review is needed to put the state pension on a long-term sustainable footing so people have certainty over what they will get and when.”