State pension triple lock expert guide and latest news

Pensions triple-lock ‘right thing to do’ says Altmann To ensure the state pension doesn’t lose value in real terms, the triple lock was introduced just over a decade ago to provide state pensioners with a pay rise every year in line with some form of inflation. The triple lock metric used to decide compares three different percentages – hence ‘triple’ lock – and the highest value determines how much the state pension will increase. While the metric is typically used every year, the triple lock saw a temporary suspension for the years 2022-23, following an abnormal rise in wage inflation (8.3 percent) compounded by the pandemic. According to the former Secretary of State for Work and Pensions, Therèse Coffey, a one-year adjustment to the triple lock was necessary to stop pensioners “unfairly benefiting from a statistical anomaly,”. However, she said the policy would be reintroduced in 2023 as the UK’s soaring inflation rate throughout 2022 led to a drop in the real value of the state pension. The triple lock was reinstated in April 2023, which saw the state pension rise in line with September 2022’s inflation rate of 10.1 percent. By honouring the triple lock, the highest percentage out of three different values is used to determine how much the state pension will increase. The three values include: Inflation Wage increases 2.5 percent. The percentages used are taken from the rates recorded from September prior to the start of the new tax year and are confirmed in November. The rise then comes into effect from April 6 of the following year, however, eligible pensioners won’t typically see the change until the first Monday of the tax year. SUBSCRIBE Invalid email We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info Triple lock is ‘unsustainable’ – Hague calls to axe formula over 5 years The triple lock applies to both the basic state pension and the new state pension to ensure each pot keeps pace with rising costs. Following April 2023’s rate increase, the full basic state pension is currently worth £156.20 per week and is available to: Men born before April 6, 1951 Women born before April 6, 1953. The new state pension is currently worth £203.85 per week and is available to: Men born on or after April 6, 1951 Women born on or after April 6, 1953. To receive any rate of state pension, people must have at least 10 qualifying years on their National Insurance record. The number of qualifying years on this record is used to determine how much state pension a person will receive but usually, to get the full basic state pension rate, a person should have at least 30. For the full new state pension, people typically need 35 qualifying years. People can check their National Insurance record online, on the Government website. The Government website also has a “Check your State Pension forecast” tool which can be used to find out how much state pension the user can get, when they can get it, and how they may be able to increase it. The triple lock is used to determine how much the state pension increases every year As the triple lock will be honoured in April 2024, it will see state pensions rise by September 2023’s wage growth rate. This is because, at 8.5 percent, it is higher than both inflation and 2.5 percent. The full-rate new state pension could therefore increase from £203.85 per week to £221.17 per week (£11,501 per year) from April next year. The basic state pension could rise from £156.20 per week to £169.47 (£8,812 per year). Concerns surrounding the future of the triple lock mount every year as uncertainty grows on whether it will be too expensive to sustain. While there have been no statements made yet to suggest it will not reinstated in 2024, the Treasury may be considering raising the state pension rate by a lower amount. Wage growth has always been calculated to include bonuses, but this year’s influx in one-off payments as part of pay settlements following strikes could see bonuses removed from the equation. The Telegraph reported that this could see the state pension only rise by 7.9 percent instead. Presenter Carol Voderman recently hit out at the idea, taking to X, formerly known as Twitter: “Tell you what….get it back from just a few of your cr***y crony VIP PPE Lane deals, and leave the pensioners alone.’ [sic]