\n The state pension has to go up with average earnings by law – unless the Government were to change this <\/p>\n
\u201cPensioners will get more money next year thanks to our commitment to the triple lock.\u201d<\/p>\n
This is the post that Chancellor Rachel Reeves made on social media platform X this morning.<\/p>\n
She is referring to the pre-Budget announcement that the Government will increase the full new state pension by an above-inflation figure of \u00a3550 per year from next April.<\/p>\n
The figure is in line with average earnings growth this summer, and under the Government\u2019s triple lock pledge, the state pension rises by the highest of average earnings growth, inflation, or 2.5 per cent every April.<\/p>\n
At 4.8 per cent, earnings growth was the highest and so this is the amount the state pension will go up by next spring.<\/p>\n
The Government has committed to keeping the triple lock<\/a> \u2013 in place since 2011 \u2013 for the remainder of this parliament.<\/p>\n But contrary to what the Chancellor has said, even if the Government had abandoned the triple lock, the state pension would still have gone up by the same amount next year.<\/p>\n The triple lock itself is a commitment \u2013 non-binding in legislation \u2013 but there is also a set of rules written into law about the state pension.<\/p>\n According to legislation that was announced in 2007 and came into law in 2011 \u2013 pensions have to increase each year in line with average earnings, regardless of whether the Government sticks to the triple lock commitment or not.<\/p>\n The alternative would be the Government over-riding or changing existing legislation.<\/p>\n In other words, the triple lock only really comes into effect when average earnings growth is below inflation<\/a> or 2.5 per cent.<\/p>\n Triple lock becomes a challenge when wages and inflation yo-yo<\/p>\n In recent years, there have been concerns raised about the sustainability of the triple lock because it pushes state pensions upwards, which in turn increases costs for taxpayers.<\/p>\n