The state pension “triple lock” is a policy mechanism that determines the annual increase in state pensions. It dictates that the pension should rise by whichever is the highest among three factors: average earnings growth measured from May to July each year, inflation as measured by the Consumer Price Index (CPI) from September, or a fixed rate of 2.5 percent. This mechanism aims to ensure that pensioners are protected from rising living costs and that their income maintains relative pace with the broader economy.

Determining the state pension involves several factors, primarily the number of years of National Insurance (NI) contributions. To qualify for the full New state Pension, around 35 qualifying years are needed, though variations exist based on specific circumstances. A qualifying year for state pension can be made up through combining earnings, NI credits, self-employment and voluntary contributions. At present, the full basic state pension stands at £156.20 per week, while the full state pension is £203.85 per week, contingent on one’s NI record.

This April both benefits and pensions were increased by 10.1 per cent, which was in line with the inflation figure of September 2022. Whilst an increase of this magnitude is unlikely this year, an uplift of around 7 per cent is not considered out of the question. Next month’s average wage figure and then September’s inflation figure which is published in October, will determine the absolute amount.

In the face of economic uncertainty and concerns over the rising cost of living, Prime Minister Rishi Sunak has expressed his commitment to maintaining the state pension triple lock. This commitment includes a willingness to increase pensions which would provide pensioners with a notable boost in their income and could alleviate some of the financial pressures associated with retirement.

While this declaration reflects a commitment to pensioner welfare, it has sparked discussions about the potential consequences for other vulnerable groups such as low-income families. The cost of living crisis has placed immense pressure on these families, making it difficult for them to make ends meet. As inflation continues to rise and outpaces wage growth, the standard benefits that low income families depend on are not expected to rise at the same rate as pensions.