The triple lock pension is a safeguard that applies to the UK state pension to ensure that it doesnt lose value because of inflation. It was introduced in 2010 by the Conservative/Liberal Democrat coalition government. The triple lock is a system of three measures that decide how much the state pension will rise each year. The three-way guarantee is that each year, the state pension would increase by the greatest of the following three measures:
- Average earnings
- Inflation, as measured by the Consumer Prices Index (CPI) in the September of the previous year
- 2.5%
If you are currently receiving the state pension, the triple lock ensures that your spending power will not diminish over the course of your retirement (for as long as all three guarantees remain in place) . It also means that if inflation is below 2.5 per cent, your pension increases will still be at least 2.5 per cent. The triple lock is important because it helps ensure that people have enough to get by in retirement and reduces the amount of private savings needed to top up someone’s retirement income.
