SAVING LOCK
OLDER households claiming a state pension usually see payments rise based on the "triple lock".
But even if you've heard of it, you might not know exactly what it means and how it affects you.
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The mechanism has been in place since 2010 and implemented every year bar one.
But what are the exact elements that make up the triple lock, and what does it mean for state pensioners?
Here's everything you need to know.
What is the triple lock?
The triple lock is a safeguard used to decide how much the state pension rises by each year.
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It was introduced by the Liberal Democrat and Conservative coalition Government in 2010.
Based on the triple lock, pension payments rise in line with whichever is highest out of the following:
- Earnings – the average percentage growth in wages in Great Britain from May to July (released in September)
- Inflation – the rising cost of living in the UK, as measured by the Consumer Prices Index (in September the previous year)
- 2.5%
It means pension payments will rise in 2024 by whichever is highest out of earnings, inflation or 2.5%.
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The triple lock has been implemented every year since its inception, bar 2022/23, when it was temporarily halted for a "double lock" and the wage element was withdrawn.
The CPI measure of inflation last September was 6.7%, but wage inflation in the three months to July was 8.5% meaning the state pension will rise by this amount.
The full rate of new state pension is currently £204.85 a week - this will go up to £221.17 a week from April.
The basic state pension, for men born before April 6, 1951, and women born before April 6, 1953, will rise from £156.20 a week to £169.47 a week.
The new state pension is for those who build up National Insurance contributions (NICs) after April 2016.
At least 10 years' worth of NICs is needed to get the new state pension, while 35 years are needed to qualify for the full amount.
You need at least 30 qualifying national insurance years to get the basic state pension.
But you can fill gaps in either your new or old state pension by paying for voluntary NICs.
Is the triple lock being scrapped?
The triple lock has seen pensioners' incomes majorly boosted since it was introduced nearly 15 years ago.
However, concerns have been raised about its long-term future as the Government grapples with a contracting economy.
For now though, it appears to be staying.
Chancellor Jeremy Hunt confirmed in last November's budget it will remain in place.
Former Prime Minister Liz Truss said in October 2022 that the triple lock would be protected too.
This means millions of pensioners will not be left worse off, receiving an extra £901.01 from April when the 8.5% rise kicks in.
It's important to note though that this is the amount your pension could rise if you're receiving the maximum amount.
You won't receive as big a boost if you have missing National Insurance years.
How much is the current state pension?
The current full new state pension is worth £203.85 a week.
State pension payments were last increased in April 2023.
The full rate of the new state pension rose from £185.15 a week to £203.85 - in line with September 2022's 10.1% inflation rate.
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Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity Turn2Us' benefits calculator works out what you could get.
Entitledto's free calculator determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data.
You can use Policy in Practice's calculator to determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
It saw yearly payments go from £9,627.80 a year to £10,600 a year - a roughly £973 rise.
Meanwhile, the basic state pension is currently £156.20 a week - worth £8,122.40 a year.
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