Today’s inflation figure is the final part in the triple lock puzzle.
The State Pension is normally increased every year according to the triple lock. This aims to boost the State Pension by whatever is highest of 2.5%, average earnings growth or inflation (CPI).
Inflation has remained stubbornly high but has come off its double-digit peak to remain at 6.7% in September. However, earnings data has remained red hot with annual growth in average total pay, including bonuses, hitting 8.5% in data issued last month.
That means pensioners are now on course for an 8.5% increase in their State Pension next year.
How much State Pension could I currently get and when?
If the State Pension does rise by 8.5%, then a full new State Pension would go up from £203.85 per week to around £221.20. A full basic State Pension would rise from £156.20 per week to around £169.50.
The State Pension isn’t the same for everyone though.
The amount you get depends on whether you qualify for the basic or new State Pension and how many ‘qualifying years’ of National Insurance (NI) contributions you have.
It will also depend on whether you contracted out of the additional State Pension.
The easiest way to check how much State Pension income you could get is by asking for a State Pension forecast.
The government’s calculator can also help you find out the earliest age you can claim payments.
A history of the triple lock in numbers
| Triple lock | Index used | CPI | Average earnings | ||
| April 2011 | 4.6% | RPI | 3.1% | -1.3% | |
| April 2012 | 5.2% | CPI | 5.2% | 2.8% | |
| April 2013 | 2.5% | 2.5% | 2.2% | 1.6% | |
| April 2014 | 2.7% | CPI | 2.7% | 1.2% | |
| April 2015 | 2.5% | 2.5% | 1.2% | 0.6% | |
| April 2016 | 2.9% | Earnings | -0.1% | 2.9% | |
| April 2017 | 2.5% | 2.5% | 1.0% | 2.4% | |
| April 2018 | 3.0% | CPI% | 3.0% | 2.2% | |
| April 2019 | 2.6% | Earnings | 2.5% | 2.6% | |
| April 2020 | 3.9% | Earnings | 1.7% | 3.9% | |
| April 2021 | 2.5% | 2.5% | 0.5% | -1.0% | |
| April 2022 | 3.1% | CPI | 3.1% | 8.6% | |
| April 2023 | 10.1% | CPI | 10.1% | 5.5% | |
| Total | 60% | 42% | 40% | ||
Source: Institute for Fiscal Studies, September 2023.
* The triple lock was suspended in April 2022 because of the dramatic growth in earnings in Summer 2021 caused by the unwinding of the effects of the furlough scheme (Coronavirus Job Retention Scheme).
Since April 2011, the Consumer Price Index (CPI) has been used for inflation instead of the Retail Price Index (RPI).
Why are earnings so high?
The earnings data has been inflated by one-off bonuses given to NHS workers and civil servants over the summer. If we strip out bonuses the figure is 7.8%. The last time earnings data was seen to be inflated was during the pandemic when average earnings soared as a result of people returning to work from furlough.
This news will be welcomed by pensioners who’ve been struggling during the cost-of-living crisis. However, after last year’s blockbusting 10.1% increase, a further 8.5% boost will certainly add to the government’s headache as to how much it will cost.
Could the government suspend the triple lock again?
The last time we saw a similar increase in earnings, the government opted to suspend the triple lock and use the lower inflation figure instead.
There’s a chance we could see further triple lock tinkering this year with the government looking to manage the eye-watering cost. We could see them opt to go with inflation or potentially take the earnings figure without bonuses.
If the government were to part ways with the triple lock again, it would strengthen the case to get rid of it completely. The consensus seems to be growing that it’s unaffordable over the long term and we need a new way of uprating the State Pension.
A looming general election might be enough to make the government keep the triple lock as it is for this year. But longer term, it’s looking more and more likely it will be dropped.
We’d like to see an overarching review of the State Pension, and the triple lock’s role within it, to give pensioners more certainty around how and when they receive their State Pension.
This article isn’t personal advice. If you’re not sure what’s right for your circumstances, ask for financial advice. Pension and tax rules can change, and benefits depend on your circumstances.
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