Fact check: Pensions triple lock was temporarily suspended after pandemic

‘Double lock’ was used to uprate state benefits for older people due to market volatility caused by Covid-19, lockdown and furlough scheme.

Wednesday 18 December 2024 12:16 EST

Changes were made to the ‘triple lock’ on pension increases as a result of the volatile labour market caused by the Covid-19 pandemic and the response to it. (Jane Barlow/PA) (PA Archive)

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During this week’s Prime Minister’s Questions debate, Kemi Badenoch stated that the Conservative Party “protected the triple lock during all our time in Government”.

Shortly afterwards, Labour MP Mark Ferguson wrote on X, formerly Twitter: “Wrong. In 2021 the Tories didn’t uprate pensions in line with earnings. That cost pensioners.”

Evaluation

In 2021, the Conservative government announced that the triple lock pension guarantee was being suspended for one year due to the after-effects of the Covid-19 pandemic. Although the state pension still rose, the increase was lower than the rise that would otherwise have been implemented. This temporary change passed the House of Commons with little opposition, and was not objected to by the older people’s charity Age UK.

The facts

The amount paid in the UK state pension increases every year under the triple lock mechanism which uprates it by the percentage of inflation, the average increase in UK earnings, or 2.5% – whichever is the highest. The policy was introduced by the Conservative-Lib Dem coalition and took effect from 2011.

In 2020 the Covid-19 pandemic led to a drop in earnings in the three months to July – the period used to calculate the triple lock – for the first time since the mechanism was introduced. Because of this, a 1992 law which only allows the Government to increase the state pension when earnings rise would have made the Government miss its triple lock commitment.

Therefore ministers introduced new rules which allowed the pension to be raised by 2.5% that year even if earnings did not rise.

The following year, the economic picture had dramatically changed. In September 2021, Work and Pensions Secretary Therese Coffey noted that the end of lockdown and furlough schemes had caused “a surge in the labour market” that subsequently created “a distorting effect on wages”.

Following the triple lock mechanism, this sudden growth in average earnings would have meant the pension increased by more than 8%, with Ms Coffey citing the Official for National Statistics. The Conservative Party proposed suspending the triple lock in favour of a “double lock” based on the higher figure of either inflation or 2.5%.

At the time, both the Government and Labour did not accept that earnings had truly risen by 8.3%. Labour’s Jonathan Reynolds (then shadow secretary for work and pensions) called for the Government to stick to the triple lock while also assessing the country’s “real wage growth”.

However, Mr Reynolds and all but six Labour MPs abstained from a vote on the amended legislation and it passed into law for one year. (Mark Ferguson, who raised this issue on X, was not an MP at the time.)

Age UK, a charity for older people in the UK which campaigns for the triple lock, reiterated its commitment to the usual system but believed this change was “a price worth paying” as long as things reverted the following year.

The triple lock guarantee returned as promised in 2022. Work and Pensions Secretary Mel Stride told the House of Commons that the pension for 2023-24 would increase in line with inflation by 10.1%.