Triple Lock future in doubt because state pension will cost extra £100 million

Stste pension future in doubt because Triple Lock will cost extra £100 million
-Credit: (Image: Reach Publishing Services Limited)


The state pension future is in doubt as the Triple Lock could cost an unwelcome £100million next year. Revised wage figures could result in the state pension costing the new Labour Party government more in 2024 next year.

Sir Steve Webb, a partner at LCP, spoke out after today's ONS figures adjusted its total pay growth figure for the three months to July 2024 from four per cent to 4.1 per cent. The 0.1 percentage point increase could add around £100 million to the pension costs in a blow to the new Labour Government.

Former Liberal Democrats pensions minister Webb said: "A slightly higher rate of increase is welcome for pensioners, though will be an unwelcome £100million extra cost for the Chancellor as she prepares her Budget."

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He said: "Even a slightly improved pension rise will however leave many pensioners out of pocket in real terms overall next April." The triple lock guarantees the state pension rises each April by the highest out of inflation (using the previous September inflation figure), wages (average growth between May and July) or 2.5% - whichever is highest.

Last month, the provisional estimate for wage growth was 4% - but today, the Office for National Statistics (ONS) said this has been revised to 4.1%. As this is higher than the rate of inflation, which is currently at 2.2% and set to fall in September, it means wage growth is still the likely method that will be used to determine how much state pensions will rise by.

There are two different types of state pension and which one you claim depends on when you were born. You'll claim the new state pension if you're a man born on or after April 6, 1951, or if you're a woman born on or after April 6, 1953.