State Pension triple lock

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 every year at least in line with earnings. 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 triple lock is a government commitment, over and above the statutory requirement, to uprate the basic and new State Pension by the highest of earnings, prices or 2.5%. Its introduction was announced by the Coalition Government in its first Budget after the 2010 election (HM Treasury, Budget 2010, June 2010, para 1.107).

The Conservative Government continued the policy after the 2015 election and “no change to the Pensions Triple Lock” formed part of the agreement between the Conservative and Democratic Unionist Parties after the 2017 election.

There was cross-party support for the triple lock in manifestos for the 2019 general election. The Government legislated in the Social Security (Uprating of Benefits) Act 2020 to enable it to meet its commitment to the triple lock in 2021/22. Opening the Second Reading debate, Work and Pensions Secretary, Therese Coffey, explained why the legislation was needed:

It makes technical changes for one year only that will ensure that state pensions can still potentially be uprated, despite the likely fall in earnings. This will allow the Government to maintain a manifesto commitment to the pensions triple lock policy, providing peace of mind to pensioners about their financial health. (HC Deb 1 October 2020 c559).

This legislation, and the continued commitment to the triple lock, had cross-party support.

The amounts by which benefits would be increased in April 2021 were announced on 25 November 2020. For the purposes of the triple lock, the highest of the three measures was 2.5%. This meant that the new State Pension would increase from £175.20 to £179.60 per week and the basic State Pension from £134.25 to £137.60 per week (HCWS 600, 25 November 2020; Benefit and pension rates for 2021-22). They are provided for in the draft Social Security Benefits Uprating Order 2021, which is due to be debated in the Commons on 9 February 2021.

For future years, decisions on changes to the triple lock will be “taken as part of the annual Budget process in the context of the wider public finances” (PQ113672, 18 November 2020).

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