The State Pension has increased in recent years in line with whichever is highest of:
This is known as the triple lock, and the current Government had pledged to keep it for the 5 years of this Parliament.
Average wage increases is currently the highest of the three. Due to the impact on wages during the Covid pandemic, the triple lock would have given a State Pension increase of between 8% and 8.5% in 2022.
The Government has therefore decided that the fairest approach for pensioners and younger taxpayers is to remove the earnings element from the triple lock formula for the 2022 increase. This means that a rise in the State Pension from April 2022 is expected to be based on the higher of CPI inflation or 2.5%.
The Government plans to return the wages part of the triple lock for the increase in 2023.
Also in this section