“The final piece of the triple lock puzzle has now been revealed, with the latest inflation data confirming that the state pension will rise by 4.8% next April in line with average earnings growth. September’s CPI figure came in at 3.8%, meaning earnings growth once again determines the uprating. For pensioners on the full new state pension, this represents an increase from £230.25 to £241.30 a week — a rise of £574.60 a year to £12,547.60. Those on the basic state pension will see their weekly payment increase from £176.45 to £184.90, or £9,614.80 a year.
Had the triple lock been pegged to today's inflation figure pensioners would have seen their pensions increase from £230.25 to £239 a week.
The triple lock was conceived as a simple idea to ensure pensioners’ incomes kept pace with living standards, but it has become a rigid and costly mechanism that drives government spending on state pensions higher regardless of the wider economic picture. While a 4.8% rise will provide welcome reassurance to retirees, it also underlines how expensive it has become to maintain the policy in its current form.
With the personal allowance frozen until at least 2028, we’re approaching the point where even those receiving only the full new State Pension could become liable for income tax. By April 2027, a minimum 2.5% annual uplift means many pensioners may start receiving tax payment requests via Simple Assessment (if they don’t have PAYE income). This will come as a surprise to many who might never have had to go through a process like this.
The state pension should be pegged to a fixed minimum proportion of average earnings. The pension should continue to be uprated with earnings, but with temporary CPI indexation when inflation exceeds wage growth. The CPI indexation would continue until earnings growth again exceeded inflation, but only for as long as the value of the state pension remained above the original fixed minimum proportion of average earnings, at which point indexation would revert to earnings.
Such a policy would mean pensioners are not hit by real falls in income, but the state pension would not continue rising ever higher relative to earnings. It would help ensure pensioner incomes move broadly in line with overall improvements in living standards across the economy.
For now, the triple lock remains politically untouchable, but as Labour embarks on its review of state pension age alongside a broader assessment of pensions and retirement adequacy, this will be one of the most politically sensitive yet economically vital debates it must confront.”
