The triple lock guarantee is a commitment from the Government that the state pension will increase each year in line with inflation, average earnings or 2.5% – whichever is highest.
But the work and pensions secretary, Thérèse Coffey, told MPs today that next year’s rise will instead only be based on the higher of inflation or 2.5%, because of an “irregular statistical spike” in average earnings growth caused by workers coming off furlough and pandemic-related restrictions easing.
That spike would mean increasing the state pension by 8% or more, which “would not be fair” given the impact on working people of other measures, such as a freeze in income tax personal thresholds, Ms Coffey added.
Parliament will first need to approve the change though, with the exact rise likely to be confirmed in October. See our State Pension guide for more info on what you could be entitled to.
The news comes just hours after Prime Minister Boris Johnson announced an increase in National Insurance contributions for workers, also from April 2022, to help fund health and social care costs.