Pensions: What is the triple lock and how does it work?

Link: https://www.bbc.com/news/business-53082530?fbclid=IwAR2kjEGvPL1TdWhbi0CbXzr5_-RwdpLIgpnkwdAF9xgEJ92FhQUPB5KRUZo

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At present, the state pension increases each year in line with the rising cost of living seen in the Consumer Prices Index (CPI) measure of inflation, increasing average wages, or 2.5%, whichever is highest.

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As people come off furlough and return to full pay, this is recorded as a large rise in average earnings. Job losses have also affected those in low-paid work too.

This leads to a unique situation, and one which economists describe as an anomaly.

Predictions by the Bank of England suggest that average earnings could go up by 8%, hence the equivalent rise in the state pension.

Author(s): Kevin Peachey

Publication Date: 13 July 2021

Publication Site: BBC