An examination of the triple lock mechanism used to uprate the State Pension - its effect so far, the arguments for and against, and the potential impact of the coronavirus outbreak.

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The State Pension for people who reached State Pension age (SPA) before 6 April 2016 has two tiers:

  • the basic State Pension (bSP) – based on a person’s National Insurance contribution record; and
  • the additional State Pension – which is partly earnings-related.

A new State Pension (nSP) was introduced for future pensioners from 6 April 2016.

For the bSP and nSP, there is a statutory requirement to uprate at least in line with earnings. The triple lock is a government commitment, over and above this, to uprate by the highest of earnings, prices or 2.5%.

Different uprating arrangements apply to the other parts of the State Pension – such as the additional State Pension and the additional amounts earned by deferring a claim to the State Pension.

The introduction of the triple lock was announced by the Coalition Government in its first Budget after the 2010 election. The Conservative Government continued the policy after the 2015 election. In the 2016 Autumn Statement, Chancellor of the Exchequer Philip Hammond said the Government would “review public spending priorities and other commitments for the next Parliament in light of the evolving fiscal position at the next spending review” (HC Deb 23 November 2016 c906). However, the 26 June 2017 agreement between the Conservative and Democratic Unionist Parties said both parties had agreed that there would be “no change to Pensions Triple Lock.”

A commitment to maintain the triple lock was included in the 2019 Conservative Party manifesto. The Government has recently said that “given the unprecedented economic context” of the Covid-19 outbreak, it would “take stock of the economy and public finances as we exit the current crisis and make the right decisions at that point.”

Arguments for and against the policy since its introduction have centred around questions of cost and intergenerational fairness.

  • Commons Research Briefing CBP-7812
  • Authors: Djuna Thurley, Roderick McInnes
  • Topics: Pensions

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