The UK government introduced the state pension triple lock in 2010 in a bid to safeguard pensioners against the risk that the real value of the pension they receive would erode over time due to rising prices (inflation). <\/p>
Effectively, it\u2019s a guarantee that pension payments will keep pace with inflation. But, its future has been uncertain over recent years due to the cost of keeping this promise. This guide outlines the key things you need to know about the triple lock on pensions and how it could affect you.<\/p>
The triple lock is effectively a guarantee on the rising value of the UK state pension<\/a>. It\u2019s designed to ensure that the pension payment you receive doesn\u2019t lose value due to inflation.<\/p> It guarantees that the state pension payment will rise by the highest of 3 measures of growth:<\/p> What this means is if, say, the CPI rises by 4% (assuming average wage increases are lower than this), then the state pension will also rise by 4%. But even if both the CPI and average earnings increase by less than 2.5%, the state pension will still get a 2.5% boost.<\/p> As it stands, everyone that is currently receiving the basic state pension (if you reached the state pension age before April 2016) or the new state pension (if you reached the state pension age from April 2016) qualifies for the triple lock. It also protects any future state pension allowance of those who are yet to retire.<\/p>Who qualifies for triple lock pensions?<\/h3>