Personal Finance

State pension increase: How does next year's boost compare to previous years?

“Last year, we had negative earnings growth and paltry inflation numbers. This year, we’ve had the opposite problem: booming wage growth and rampant inflation thanks to the end of the furlough scheme and reopening of the economy.

“Nothing has really changed fundamentally speaking, but the economy is playing catch-up, and this is skewing the numbers.

“Both years, the Chancellor has elected to tinker with the triple lock. Last year, state pensions were manually increased by 2.5 percent to get around a technicality in the legislation that would have blocked the triple lock given negative wage growth.

“This year, the earnings growth element has been removed to bring the uprating back down to earth. Average earnings hit 8.3 percent in the three months to July 2021, which would have been used as the uprating figure.


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