top of page

Triple Lock Unpicked

Updated: Oct 26, 2022

The state pension is a regular payment from the government that most people can claim when they reach state pension age. Your state pension age depends on when you were born and you can find it by using the GOV.UK website.


Your level of state pension depends on your National Insurance record, which includes NI contributions that you pay when you are working and contributions that are credited to you when unable to work.


To preserve its buying power, the state pension rises each year to reflect trends in the wider economy. These rises are set by the triple lock, a rule that ensures the state pension will rise by the highest of three measures:


· 2.5%

· The rate of inflation (measured by the consumer price index)

· Average wage growth


But, as with so many things, the Covid pandemic has created a significant distortion.


Millions of workers were on furlough and therefore on reduced wages as businesses scaled back during the various lockdowns. But businesses are now opening up again, which has caused an unusual spike in wage growth as workers go back to full pay. Official figures show average UK earnings grew by an annual 7.3% in the March to May period. The Office for Budget Responsibility expects this to rise to 8% in the May-July quarter, the period used to determine the state pension rise (Sky News Source)


If the government had stuck to the triple lock rules, an 8% rise would have been applied to the state pension from next April. This would have put a £3bn strain on a Treasury already struggling with a huge pandemic debt. Also, it would have been politically awkward to have pensioners benefiting at the expense of younger people who’re generally regarded as having shouldered the greatest burden during the pandemic. So, in September the government decided to suspend the triple lock guarantee for the 2022/23 tax year. With the consumer price index hitting 3.2% in August, it’s likely this will be used to determine next year’s increase.


If, on the other hand, the state pension increased by just 2.5%, the full state pension payment for 2022/2023 will be:


· £184.09 a week (£9,572.68 a year), up from £179.60 a week (£9,339.200) in the current tax year;

· Basic State pension (those who have claimed their pension before April 2016) will be £141.04 a week (£7,334.08 a year), up from £137.60 a week (£7,155.20).


The government has said that the triple lock will be restored next year, but an important lesson to take from this is: don’t solely rely on your state pension to boost your pension pot.



Not yet a client of Reeves Independent?



The articles are for information only and should not be construed as advice or a recommendation. Please seek independent financial advice before taking any action. No action should be taken without independent professional financial advice as any actions on your pension may be irrevocable and have a big impact on your income in retirement.


The contents of this post are not intended as and should not be taken as advice. Any actions taken on your financial products may be irreversible and could negatively impact your financial planning, so we recommend seeking personalised financial advice before acting. Investment performance is not guaranteed, past performance is not an indicator of future performance, and you may get back less than your original investment.

Reeves Group Logo
Reeves Independent Logo
  • LinkedIn
  • Facebook
  • YouTube
FT Top 100 financial advisers
winner of services award

Main Office & Postal Address

Reeves Independent Ltd, National Advice Centre, Park View House, Benton, Newcastle Upon Tyne, NE7 7TZ

Reeves Independent – The Pension Specialists and Reeves Investment Services are trading styles of Reeves Independent Limited which is Authorised and Regulated by the Financial Conduct Authority under the FCA financial services register no. 839943. Company Registration No: 11751772, Registered Office Address, Reeves Independent, National Advice Centre, 2nd Floor, Park View House, Front Street, Benton, Newcastle Upon Tyne, NE7 7TZ. Registered in England and Wales. The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Reeves Investment Services is a trading styles of Reeves Financial Services Limited which is Authorised and Regulated by the Financial Conduct Authority under the FCA financial services register no. 187607. Company Registration no: 03586020, Registered Office Address, Reeves Independent, National Advice Centre, 2nd Floor, Park View House, Front Street, Benton, Newcastle Upon Tyne, NE7 7TZ. Registered in England and Wales.

The value of investments can rise and fall and you may not get back the full amount you invest.

bottom of page