Bumper celebratory blog – as triple lock bites!

This is a bumper celebratory blog as it marks 7000 blogs published on henrytapper.com.

But much more importantly – it celebrates a great day for British pensions as the third leg of the Triple Lock cuts in to give British Pensioners a bumper rise in retirement income.

But you wouldn’t have thought there was much cause for celebration reading the pension press

So why so shy – pensions people?

We may not like to admit it, but we are a little scared of the state pension which competes for attention with private pensions (which earn us a living). The higher the state pension , the less ammunition we have to sell doom and gloom to employers who don’t sponsor workplace pensions to the levels we like and to savers who don’t swap jam today for jam tomorrow.

This bumper pension increase is also the result of a big pay increase for the public sector

Public sector pay growth has jumped 9.6 per cent, the fastest rate since current records began 22 years ago. Private sector wage growth, meanwhile, is slightly more modest at 7.9 per cent. The NHS bonus – a one-off payment of between £1,650 and £3,500 given in June – helped lift overall wages up by 8.2 per cent, higher than inflation (at 7.9 per cent), the first time that has happened since March last year.

That bonus is “pensionable” – for everyone – as it counts against the triple lock!

The July earnings number are the first in three months , that feed into the September calculation (so the bonus will be diluted) but it was “the bonus wot dunnit!”, triggering the earnings leg of the triple lock.

And this news arrived 24 hours before the ONS announced that inflation has fallen. Had we excluded wages from the triple lock, pensioners would have missed out even more than we expected  yesterday!

The bumper pay rise for the public sector will also feed into public sector pensions , though most public sector workers are offered a pension against career average earnings, so for long-servers, the impact will be diluted. We should be celebrating that, plus the fact that public sector pensions are generally uncapped by the 5% pa limit of private pensions, meaning public sector pensioners could get a double bubble pay rise.

Sadly, I suspect that that news will be met with the same glum response as evidenced above. Unless good news on pensions feeds into more assets under management/advice, we see it as counter to our own myopic interest.

Despite countless surveys telling us we can’t afford to retire, an increasing proportion of us can afford to retire and can look forward to retirement with confidence – thanks to an improving state pension  and proper public pensions. When this blog started in 2009, we could not have envisaged the recovery the state pension has made.

A glass half-full

Coincidentally, I was sat in LCP’s offices yesterday morning, when the architect of much of that improvement bounded in like Tigger, waving his calculations on how pensioners would be better off.

I was there with people who work on public sector pensions and – though they are not paid on assets under management/advice, they were celebrating pensions paying better pensions too.

If only all of us , had the enthusiasm for pensions (rather than pension saving).

Because, though the pension increase will immediately impact today’s pensioners, it is locked in for all of us who have yet to reach retirement age. Those who retire in 50 years time will get the benefit of this increase.

Paying better pensions should  not be a worry or a concern

When I read negative headlines in the pension press, I wonder.  We are here to restore confidence in pensions, not to undermine it.

Of course this country can afford a proper state pension. As callers into the late night phone in I was listening to , repeatedly told us – £11,500 isn’t a living wage. Even for couples, £23,000 isn’t going to pay all the bills.

Relative to the state pensions enjoyed by most of our neighbors, both in geography and wealth, Britain still has a shockingly low state pension

So people will still need private pensions or independent savings to have a financially secure retirement. And many will still need pension credit to top them up to subsistence living.

Appendix; Work worries persist

As we move towards a more just settlement for pensioners, we cannot ignore the hard truth that many people over 50 are no longer working, not because they are sitting back on their pensions , but though ill- health

The most pressing problem is the number not looking for work citing long-term health problems: this figure is still trending upwards and has hit a record high of 2.6 million.

Workplace pensions need work to work. We should not be worrying about paying those with full entitlements to the state pension more, so much as worrying that many who will be reaching retirement in years to come, will not have worked their full 35 years and not generated the revenues to pay future pensioners.

To have a healthy pension system, we need to have healthy workers.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions. Bookmark the permalink.

4 Responses to Bumper celebratory blog – as triple lock bites!

  1. John Mather says:

    To have a healthy pension system, we need to have healthy workers.

    And a healthy productive economy, not one borrowing to meet expectations

    • Peter Tompkins says:

      It’s not the triple lock you are marking rather the double lock that raises pensions by wages rather than prices this time. This is partly redressing the one year freeze during those post Covid times.

      Ultimately wage rises on pensions should be affordable through the rises in NI that those wage rises deliver. It’s the 2.5% minimum in the triple lock that needs to be ended to have a more robust system that won’t necessitate the regressive rise in state pension age.

      • ros altmann says:

        This is spot on Peter! Triple lock is an outdated and inefficient concept, which gives best protection only to those who are on the new State Pension i.e. the youngest pensioners. Pension Credit, SERPS, S2P, other additions to the old Basic State Pension are not triple locked anyway. So the poorest and oldest pensioners have less protection.
        Since 2016 with the new State Pension, the triple lock has not worked properly. It is a political construct and a misleading measure of how well this country protects the elderly. 2.5% makes no sense and, with inflation and earnings much higher now, it’s a good time for politicians to own up, but they seem too timid to do this. And, don’t forget, the triple lock was abandoned when the Government simply dropped the earnings link by changing the law (which the Lords voted against but Commons overturned) giving state pensions only 3.1% rise, just as inflation was heading into double digits!

  2. Bryn Davies says:

    It was never gilts that were risk free. It was matching the liabilities that made the play risk free. But too many people seemed to forget the matching bit.

Leave a Reply