Government unpicks the pension triple lock
Pensioners had been in line for a bumper increase in the state pension from April 2022 under the triple lock rules. However, the government has now confirmed this will not go ahead. What’s going on?
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Government rushes through NI cap on pension salary sacrifice
The government has already drafted legislation to impose a £2,000 limit on NI exempt pension contributions under salary sacrifice arrangements. What else do we know?
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Sneaky change is a blow for side hustles
With most of the media focused on the headline-grabbing announcements from the Budget, a read of the published small print reveals another change coming in 2029. It’s bad news if you are an employee with a side hustle, but what’s going on?
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The pensions triple lock refers to the set of rules by which the state pension rises each year. Under the lock, the state pension rises by the greater of:
- inflation, as measured by consumer prices index (CPI)
- the average wage increase; or
- 2.5%
This has been the case since 2010, and guarantees that the state pension does not fall in real terms. However, the government has suspended the triple lock mechanism for 2022/23. As employees returned from furlough between May and July this year, they also returned to full pay. This produced an artificial rise in average earnings of approximately 8%. The government feels that this justifies reducing the lock to a double lock, i.e. the state pension will increase by the greater of the CPI inflation percentage, or 2.5% from April 2022. It has pledged that the triple lock mechanism will return for 2023/24. Whilst the move is perhaps understandable in the unique circumstances, some critics say that it is a precursor to abolishing the triple lock altogether.
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