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State Pension triple lock paused – what this means for retirees

The government confirmed plans to suspend the triple lock rule for one year. We explain how this could impact your State Pension income.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

State Pension increases are normally based on the triple lock. This means it rises by the greater of wage growth, inflation (CPI), or 2.5 percent each year.

On Tuesday 7 September, the government confirmed plans to suspend this rule for one year.

Why is the triple lock being suspended?

Average wage growth is estimated to be abnormally high for this year. In fact in the three months to July 2021 it was a whopping 8.3%. This is largely due to the impact of the coronavirus on wages in the previous year.

The government feels this increase to the State Pension would be disproportionate. It would’ve been the largest increase since the triple lock was introduced in 2011 as the figures below show.

Year State Pension increase
April 2011/12 4.6%
April 2012/13 5.2%
April 2013/14 2.5%
April 2014/15 2.7%
April 2015/16 2.5%
April 2016/17 2.9%
April 2017/18 2.5%
April 2018/19 3.0%
April 2019/20 2.6%
April 2020/21 3.9%
April 2021/22 2.5%

Source: House of Commons Library, February 2021

Any income you’re receiving from the new or basic State Pension will still increase by the greater of inflation or 2.5% in April 2022. The government also intends to revert to the use of the ‘triple lock’ in the future.

How much State Pension could I currently get and when?

The State Pension isn’t the same for everyone. The amount you’ll get depends on whether you qualify for the basic State Pension or new State Pension and how many ‘qualifying years’ of National Insurance (NI) contributions you have. It will also depend on whether or not you contracted out of the additional State Pension.

The easiest way to check how much State Pension income you could claim is by asking for a State Pension statement. The government’s calculator can also help you find out the earliest age you can claim payments.


Other ways to boost your State Pension

You could think about delaying your State Pension payments once you reach State Pension age. If you do, the government will increase the amount you receive by around 5.8% for every year you delay taking an income.


You could also consider filling any gaps in your National Insurance record, if eligible. You need a minimum of 35 years of National Insurance (NI) contributions to be eligible for the full new State Pension income. Choosing to make voluntary NI contributions could increase the amount of income you receive.

If you’re married or in a civil partnership, were born before 6 April 1951 (men) or 6 April 1953 (women) and aren’t getting a full State Pension, you also might be eligible to increase your basic State Pension to £82.45 per week. Check if you qualify.

If you’re over State Pension age and earn less than £100 a week, you could claim pension credit. This is an income-related benefit, on which you won’t have to pay tax. To find out if you’re eligible, and how much you could receive, you can use the government’s calculator

This isn’t personal advice. If you’re not sure if a certain action is right for you, ask for financial advice.

Can you live off the State Pension alone?

Lots of people believe the State Pension will be enough to live off alone. But the likelihood is, for most people, it won’t be.

Currently, if you receive the full new State Pension you’ll get £9,339.20 a year. That means you’d fall short by around £23,000 if you wanted to reach a ‘comfortable’ living standard suggested by industry experts. And as shown by the pause to the triple lock, the government can change the rules at any time. This highlights the importance of saving into a workplace or private pension alongside anything the state offers.

Realistically, your retirement could last 20 or 30 years. You need to make sure you’ll have enough money to last as long as your retirement. Our pension calculator can help you work out how much your current pensions are on track to pay and tips to consider if you’re falling short of your income goals. Remember, you can’t usually access the money in your pension until you’re 55 (57 from 2028).


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Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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