The government has confirmed that it will break its State Pension triple lock pledge next year due to a spike in average earnings as a result of the pandemic. The Government will suspend the triple lock for 2022/23, with the rise instead being the higher of inflation or 2.5%. The move means pensions will not rise by 8% next April because of a surge in annual wage growth. With inflation rising it is likely that the eventual increase will be in the 3-4% range, pension consultants LCP estimate. The move is estimated to save the Treasury around £4bn.
Work and Pensions Secretary Therese Coffey told the Commons: "Tomorrow, I will introduce a Social Security Uprating and Benefits Bill for 2022-23 only. "It will ensure the basic and new state pensions increase by 2.5% or in line with inflation which is expected to be the higher figure this year and as happened last year it will again set aside the earnings element for 2022-23 before being restored for the remainder of this Parliament." Coffey said she was taking the measure to stop pensioners “unfairly benefitting from a statistical anomaly,” where the rise in annual earnings this year was a result of millions of people seeing their wages fall 20% while they were on furlough last year. She added: “We can and will apply the triple lock as usual from next year for the remainder of this Parliament, in line with our manifesto commitment.”