The Office for National Statistics (ONS) in the UK has released average earnings figures for the May-July 2022 period, which are used to calculate pension uprating under the triple lock.
Wage growth figures for the three month period came in at 5.5% – total pay including bonuses. This means that the earnings component of the triple lock will be at 5.5%.
Under triple lock rules, state pensions increase every year according to inflation, earnings or 2.5% whichever is highest.
The inflation component for the triple lock is based on September’s Consumer Price Index (CPI) figures.
Inflation has already surpassed 10% in July and is likely to continue on its upward trend for the September figures, which means there is set to be a very generous increase to state pensions in April 2023.
Kate Smith, head of pensions at Aegon, said: “The government has previously committed to reinstating the triple lock after suspending the earnings element for 2022-23 due to distortions caused by the covid pandemic.
“With inflation into double-digits, average earnings (total pay) of 5.5% isn’t expected to be the deciding factor in next April’s state pension increase. The state pension is likely to increase by around double this at over 10%, confirmed in September’s inflation figure.
“While prime minister Truss committed to reinstating the triple lock in the immediate term during her leadership campaign, questions will remain over its affordability and whether the triple lock will survive in its existing form in the manifestos of all parties ahead of the next general election.”