State Pension triple lock: what it is and what might change?

The triple lock is the government’s commitment to ensure State Pension income keeps up with the cost of rising prices for goods and services as well as real earnings. 

But the policy is expensive, with a Parliament research briefing highlighting that “concerns have been raised about the sustainability of the triple lock in the long term”, leading to questions about how it will work in the future.

What is the State Pension triple lock?

The State Pension triple lock is a government guarantee that the State Pension will increase every year by either the rise in inflation, earnings or 2.5%, whichever is highest. The increase applies to both the new and basic State Pension and takes effect every April. 

Rises are calculated based on the consumer price inflation (CPI) figure for September of the previous year, the average increase in wages during the May to July period of the previous year, or 2.5%.

The triple lock was introduced by the Coalition Government in its first Budget after the 2010 election. It came into force in April 2011 and has been applied every year since, except for a temporary suspension in 2022/23 during the Covid 19 pandemic.

What does the triple lock mean for my State Pension?

The triple lock, along with the introduction of the new State Pension, has increased the value of the benefit significantly. When compared to average earnings the State Pension is now at a level not seen since 1980, when the policy of uprating in line with earnings ended.

The impact of the triple lock on the State Pension changes every year, with the rise for April 2025 likely to be coming from the earnings increase.

The figures the government uses originally showed average earnings were 4% higher than the same period a year earlier, putting it above current inflation (which was 1.7% in September) and 2.5%, making it the likely measure that will be used to calculate the triple lock boost.

However, the Office for National Statistics (ONS) revised this number a month later, putting average earnings at 4.1% - a small increase in the amount received for those on the State Pension compared to the previous figures.

If the original numbers are used, it means those on the new State Pension should receive an extra £460 for the year from next April, paid weekly - for those on the old basic State Pension, it’ll pay an additional £353. 

If the new figures are those used by HMRC next year when confirming the State Pension amounts for 2025, then the numbers rise to £473 and £361 respectively.

Potential State Pension increases

Using 4% earnings growth.

Using 4.1% earnings growth.

Source: LCP 

However, people on the old system who also have ‘additional’ State Pension (SERPS) will only see that part of their pension rise in line with inflation.

Not everyone on the new State Pension gets exactly the standard rate – in particular, pensions consultancy LCP says, many workers who were in ‘contracted out’ occupational pension schemes may get less than the full rate (their occupational pensions will typically rise by no more than inflation).

What could happen to the triple lock in the future?

The triple lock policy isn’t just expensive, but because it’s linked to three measures, it increases government spending on the State Pension over time in a way that makes it difficult to plan public finances.

Compared with the cost of solely increasing the State Pension in line with average earnings, the Institute for Fiscal Studies (IFS) has projected that – on its own – the triple lock could easily cost anywhere between an additional £5 billion and £40 billion per year in 2050 in today’s terms.

However, Steve Webb, partner at LCP and the Pensions Minister who introduced the triple lock in 2010, points out there is a commitment by the Labour Government to stick with the policy for the lifetime of this Parliament.

Ultimately, Webb told Saga Money News, there will come a point when the State Pension has reached a target level – for example, around one third of average earnings – “at which point a switch to an earnings link might be appropriate”.   

The government may also, he suggests, say the triple lock would remain until a certain figure had been reached.  

“A percentage of average earnings might be a bit messy so it could simply be a headline cash figure – for example, keeping the triple lock until the new State Pension reaches £12,500 – and then earnings-link after that,” he says.

The IFS, in its research into the future of the State Pension, has agreed that the government might set a target level for the new State Pension, and this could be “expressed as a share of median full-time earnings. 

“Increases in the State Pension will, in the long run, keep pace with growth in average earnings, which ensures that pensioners benefit when living standards rise.”

Based on current forecasts, the full new State Pension is set to hit almost £12,000 next year – not far off the current tax-free Personal Allowance of £12,570.  Using predictions of the triple lock increase, the new State Pension could be worth nearly £13,250 by 2030.

How the State Pension could grow between now and 2030

Source: AJ Bell (Earnings/inflation figures based on Bank of England projections until 2027/28, then set at 2% thereafter.)

However, the fact the triple lock has run from the start of the Coalition Government in 2010 and is set to continue until the end of this parliament (at the earliest) shows the challenge in breaking it.

Jon Greer, Head of Retirement Policy at wealth manager Quilter, says the sustainability of the triple lock in the long term is “questionable” – but that it’s politically difficult to address, “with no government willing to make drastic changes due to the potential backlash from a core voter base”. 

However, each uprating of the State Pension “risks creating generational divides”, says Greer, as younger workers are potentially forced to pay for increases in the State Pension that outpace any pay rise they’re likely to get. 

The government’s current pension review, launched in July 2024, will look at pensions adequacy, which must consider both state and private provision. 

Greer says: “Perhaps the review will be the mechanism to start the journey for change that removes the politics from the triple lock.”