Triple pension lock to come back for next year – here’s what it means.
We explain how triple lock works and what it means for state pension.
What is Triple Lock?
The triple lock is a calculation used to determine how much the state pension increases each year.
It was introduced by the coalition government in 2010 and has seen an increase in pension payments corresponding to whichever is highest:
- Earnings – Average percentage increase in wages in Great Britain
- Prices – the rising cost of living in the UK, as measured by the Consumer Price Index (CPI)
Rising inflation is expected to benefit retirees hit more than 10% this year,
An increase in inflation could increase the income of those in retirement by about £1,000 a year.
Last year, the maximum basic state pension, which is for those with a national insurance record prior to April 2016, increased to £5.05 – meaning the maximum payout increased from £129.20 to £134.25 a week.
The new state pension amount is now £185.15 and could exceed £200 per week in 2023.
The new state pension is for those who make up the National Insurance contribution after April 2016.
Ten years are needed to get the new state pension, while 35 years are needed to qualify for the full amount.
You need at least 30 eligible National Insurance Years to get Basic State Pension.
Is triple lock being abolished?
No, although there was triple lock replaced with a double lock promise Last year’s Triple Lock is returning next year.
Last year, salary hikes were removed from apportionment as the coronavirus skewed salary data Bumper salary given to pensionerswhy
instead of this State pension rates hiked by inflation of 3.1% In April, based on last year’s inflation data.
but Inflation is currently well over 9% Leaving pensioners in a really bad shape.
If inflation reaches 10%, as experts predict, it could raise state pension payments by an additional £18.52 a week – or £962.78 a year.
Although the lock is set to be returned, last year there were calls for the triple lock to be axed for years given its cost on the public exchequer – either becoming double lock or abolished altogether.
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