The Triple Lock Values for April 2025
The Triple Lock means that the basic State Pension (bSP) and new State Pension (nSP) will increase by the higher of:
Note that uprating also applies to other payments such as the Personal Independence Payment, Disability Living Allowance, Attendance Allowance and the standard minimum guarantee element of Pension Credit, some of which are uprated according to earnings inflation, others with prices inflation.??
There are also other benefits that are uprated ‘at the Secretary of State’s discretion’.? These include, for example, the personal or standard allowances of Universal Credit, Income Support and Housing Benefit.?
Further, the Triple Lock does not apply to the additional State Pension, payable to some in addition to the bSP.?
The focus of this article is on the Triple Lock for the basic and new State Pension.
Much has been written in the news and elsewhere predicting the value of next year’s State Pension increases.? These are only predictions as we do not have all of the information we need to be sure.
Ahead of the General Election, the Labour Party made their Manifesto pledge on page 79:
There is no legislative requirement for a triple lock, as The Social Security Administration Act 1992 (and Northern Ireland equivalent) only requires The Secretary of State to increase pensions in line with a review of the general level of earnings over a review period.? If the level of earnings is higher at the end of the period than at the start, an Uprating Order must be made to match earnings inflation.?
There is no legislative requirement to increase by the value of CPI inflation or 2.5% - this is a political decision.?
However, give the political decision to maintain the Triple Lock, things have been different in recent years with fluctuating earnings and inflation, for example:
The State Pension increased by 2.5% requiring a legislative intervention, when earnings inflation was negative and CPI inflation was 0.5%.? There was no requirement for this 2.5% increase, as earnings inflation had not increased.? Yet, the political decision to keep a Triple Lock meant that this was required.
The State Pension increased by a ‘Double Lock’, with legislation made to ignore the requirement to look at the rate of earnings inflation for one year only, hence...
Saw the return of the Triple Lock when the State Pension increased by the value of CPI inflation (10.1%).
Assuming the UK Government make good their Manifesto pledge, the State Pension will increase by the highest value – but we don’t have all the values to be able to make a certain prediction.
To repeat, as there is nothing in legislation, the Triple Lock can fairly be described as something that is politically-decided.? There are three factors, as above, but the information comes from different places:
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There is no statutory definition of earnings inflation only that the Secretary of State ‘shall estimate the general level of earnings in such manner as he sees fit.’? Convention has indicated the Government compared the Nominal Average Weekly Earnings (AWE) from the Office for National Statistics (ONS) for the three months to July in one year and compared it to the following year (i.e. for the rates in 2025, looking at May to July 2023 compared to May to July 2024).?
On 10 September 2024, the ONS published this information showing that average weekly earnings increased by 4%, i.e. the increase between May to July 2024 was 4% higher than the comparable quarter the year before.?
That’s one figure known, although this may be revised upon publication of the next quarter’s increase on 15 October 2024.
On 14 August 2024, the ONS published the CPI rate for July 2024, i.e. the increase in costs in the 12 months to July 2024.? Note we are looking at the CPI rate, not CPIH (the Consumer Prices Index including owner occupiers' housing costs) or Core CPI (the Consumer Prices Index excluding energy, food, alcohol and tobacco).
We are not interested in this figure.
We are looking for the CPI rate in the year to September 2024.? This is set to be published in October 2024.? So, the data has not been published.?
We do not have this value. If we don't have one of the values required to calculate the Triple Lock increase, we cannot accurately make predictions.
We do know this value!
Nobody can make a prediction that is accurate if we need three values. So, set your watches because now, we do not have all the information we need to be able to predict the rate State Pensions should increase in April 2025 if the Triple Lock is maintained.?
We need to be looking for one value to complete the picture:?
The average earnings inflation is where some analysts predict this will be higher than the rate of CPI inflation.? This is currently rumbling around the 2.2% mark.?
The bSP and nSP values will be confirmed at this year’s next ‘fiscal event’, aka the October UK Budget.
The triple lock was announced by the Conservative / Liberal Democrat Coalition UK Government at Budget June 2010.? This applied for the first time for the financial year commencing in April 2011 (through to April 2012) although the Retail Prices Index (RPI) measure of inflation was used to increase State Pension.? Before then, the State Pension was always increased in line with increases highlighted by the September RPI.??
It’s always interesting to look at the operation of the Triple Lock over the years showing the increases that have applied, highlighting the factor that was used (i.e. earnings, CPI or the 2.5% Lock):