Is the Triple Lock Pension Really Worth?

Christine Mary Edwards

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Is the Triple Lock Pension Really Worth?

If you are a pensioner in the UK you must be aware of the Triple Lock pension policy, and if you are not, then you must be as this affects your pension and spending capacity a lot.

Let’s first understand what a Triple Lock pension actually means. You know how fast inflation is rising and with the rising inflation it is extremely important to safeguard the value of your pension.

For example, the price of a product 20 years ago was £1 but now it may be £4, and it may be £7 after 20 years but if your pension won’t increase, your buying power will be less.

To safeguard your buying and spending power, the government has come up with the Triple Lock policy in which your state pension will rise every year by the highest of three measures:

  • inflation (CPI)
  • average earnings growth, or
  • 2.5%

What is Triple Lock Pension

The Triple Lock policy was introduced to the UK state pension in 2010 to safeguard and protect the value of state pensions in the UK.

This policy ensures that the value of the pension amount will not decrease and at least be in line with inflation.

The Triple Lock means the state pension is protected by three measures which are:

  • inflation as measured by the Consumer Price Index (CPI)
  • earnings growth
  • 2.5%

The highest of the three will be taken as a parameter to increase the state pension every year. For example, if the inflation rate is higher than 2.5% and the earnings growth in 2025, let’s say 2.8%, then the state pension will rise by 2.8% next year.

This will ensure if not more, at least the pension value will align with the inflation and the pensioners will not face any problem in future.

This also means, there will be times when the state pension amount will beat the inflation in the UK and result in an increase in the buying power.

Who Qualifies for Triple Lock Pension

Now that you have understood what the Triple Lock pension policy is, let us now understand if you qualify for the Triple Lock pension or not.

  • The very first and basic thing is, that you must have reached the state pension age i.e. 66 years, but this age may go up in the future, so you should confirm this.
  • You need 35 qualifying years in your National Insurance contribution (if you are under the old basic State Pension and have retired before 2016 then you’ll need 30 qualifying years.
  • You need at least 10 qualifying years to get any State Pension and 35 qualifying years for the full pension (under the new system after 2016).

What’s a Qualifying Year?

  • You’ve worked and paid enough National Insurance (NI) contributions through your salary.
  • You need to earn at least a certain amount during the year (about £6,396 in 2023/24) to count as a qualifying year.
  • Even if you don’t work (for example, if you’re unemployed, a carer, or on maternity leave), you may still get NI credits that count as qualifying years.
  • If you have missing years, you can sometimes make voluntary NI contributions to fill the gaps.

How Much will the State Pension be with the Triple Lock?

This really depends on which State Pension system you are in and how much it increases based on inflation, earnings, or 2.5%. Let me explain it simply:

  • If you are under the New State Pension System: for people reaching pension age after April 6, 2016:
    • In 2023/24, the full new State Pension is £203.85 per week.
    • now, let’s say, inflation is 6%, your pension would rise by 6% for the next year.
  • If you are under the Basic State Pension System: for people who reached pension age before April 6, 2016:
    • The full basic State Pension is £156.20 per week in 2023/24.
    • Like the new State Pension, it will increase by the highest of the three Triple Lock measures.

Each year your pension will rise based on the Triple Lock to keep up with inflation or wage growth.

Who Introduced Triple Lock Pension?

It was introduced by the UK government which was a coalition government between the Conservative Party and the Liberal Democrats in 2010.

What are the three measures in the Triple Lock Policy?

The three measures are inflation as measured by the Consumer Price Index (CPI), earnings growth, and 2.5%

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