The State Pension is governed by a triple lock formula based on the greater of earnings growth, price inflation, or 2.5%.
There is ever growing speculation that Chancellor might deviate from this next year. Why would he do that? Well, as the COVID restrictions are relaxed and furloughed people return to work on full pay, the growth in earnings will spike.
Financial pundits report that if earnings growth is 8% the increase in the cost of the State Pension would be in the region of £3bn!
In the 2019 election, the Government promised to continue raising the state pension in line with average earnings, the annual inflation rate or 2.5% – whichever is higher, however in a series of radio and TV interviews, Mr Sunak refused to say whether the guarantee would be honoured this year.
We will keep our website updated as information becomes available.
Meanwhile Pensions Age have today reported that
Strong earnings growth raises further questions about affordability of state pension triple lock…
You can read the full article here