State pension: Triple lock to be updated from tomorrow as inflation figures are released

State pension: Triple lock to be updated from tomorrow as inflation figures are released

State pension payments are dependent on a claimants National Insurance record, with 10 years of contributions needed to receive any income and 35 years needed for the full amount of £175.20 per week. However, when the payments are being received they are guaranteed to increase every year under triple lock rules.

These rules ensure state pension payments increase by the highest of the average percentage growth in wages (earnings), the percentage growth in prices as measured by the Consumer Prices Index (prices) or 2.5 percent.

The government takes these measurements at different points of the year, with average earning growth being officially recorded at 0.1 percent in July 2020.

Inflation figures for the UK, as measured by CPI, will be released tomorrow.

This means retirees will likely be able to work out how their state pension payments will increase going forward.

READ MORE: State pension UK: This is how wages will impact payments

Thérèse Coffey, the Secretary of State for Work and Pensions, recently addressed pension changed in the House of Commons but she highlighted triple lock rules are unlikely to be scrapped: “This Government is absolutely committed to fulfilling its manifesto commitments.

“This is not about abandoning the triple lock in any way. But… there are some consequences.

“If average earnings fall during this year that we need to rectify in order to make sure that aspects of the law that is already in place cannot be set aside”.

Similar assurances were also recently shared by Rishi Sunak, the Chancellor of the Exchequer.

As he confirmed on LBC when asked whether pensions would be protected by the government: “Yes, our manifesto commitments are there and that is very much the legislative position.

The government has detailed the triple lock will be spared from recuperation plans but Jon Greer, the head of retirement at Quilter, recently called it’s sustainability into question.

As he commented in September: “The triple lock has worked well in reversing the relative decline in the state pension so that it has made up much of the ground it had lost relative to earnings during the 1980s and 1990s.

“However, once the furlough scheme ends later this year and if wages recover, the current triple lock will provide a considerable boost to the level of state pension at a time when many are out of work and the government struggles to control the deficit.

“This is untenable both in terms of its fiscal sustainability and intergenerational fairness.”

Jon went on to conclude: “Maintaining the triple lock in its current form is simply not an option.”

Published at Tue, 20 Oct 2020 08:46:00 +0000