Triple-lock State Pension Level Hitting Headlines After Latest Pay Levels Announcement By ONS

12th September 2023

Today's official earnings growth announcement from the Office for National Statistics (ONS) could cement a second bumper state pension increase in a row in 2024.

The ‘triple-lock' guarantees the state pension rises by the highest of average earnings growth, inflation or 2.5% each year.

Seasonally adjusted pay growth for the three months to July is the figure that counts for the triple-lock, while CPI for the year to September is the key inflation figure.

Figures published in August revealed a shock spike in earnings growth to 8.2% - higher than CPI inflation, which currently stands at 6.8% (Source: AWE: Whole Economy Year on Year Three Month Average Growth (%): Seasonally Adjusted Total Pay Excluding Arrears - Office for National Statistics (ons.gov.uk).

If this earnings growth figure is repeated in July and used for the triple-lock, this would imply:
An increase in the old state pension from £156.20 per week to £169 per week
An increase in the new state pension from £203.85 per week to £220.55 per week

Had the new state pension increased in line with either inflation or wages since 2011, it would be worth around £180 per week today - meaning the policy has added an extra £11 billion a year to public spending, according to the Institute for Fiscal Studies (IFS) (The triple lock: uncertainty for pension incomes and the public finances | Institute for Fiscal Studies (ifs.org.uk)

In 2022/23, the government spent £110 billion on state pensions, with the Office for Budget Responsibility (OBR) predicting real-terms state pension spending will rise by £23 billion by 2027/28

Read the full article by Meg Bratley HERE