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Inflation reaches 10.1% - will the Triple Lock for pensions be maintained?

Geoff Riley

19th October 2022

Inflation reached 10.1% in September - prices are now rising at a 40-year high. The BIG decision facing the UK government is whether the value of the state pension will rise by the same amount in April 2023 since the government has a commitment to the pension "triple lock". There are signs that this commitment is wavering as the Chancellor looks for ways of controlling welfare spending.

Inflation reaches 10.1% - will the Triple Lock for pensions be maintained?

Inflation has climbed back above 10% according to the data for the UK consumer price index in September. This is causing a further squeeze on real living standards since money wages are not keeping pace with rising prices.

The UK Consumer Prices Index (CPI) rose by 10.1% in the 12 months to September 2022, up from 9.9% in August.

Food and non-alcoholic drinks prices have increased by 14.6% in the last year. The average grocery bill for a household has climbed by more than £600 – hitting lower income households hard.

A lot of food production is energy intensive, so the steep rise in food prices is closely linked to what is happening to global energy prices.

September’s inflation figure is used for reviewing the triple-lock pension commitment. The triple-lock means pensions will rise by either average earnings, CPI inflation or 2.5% - whichever is highest.

There are indications that the UK government is re-considering their commitment to the triple lock for pensioners. This will be a big political decision!

One good sign is that the cost of fuel is now starting to fall – but inflation is likely to remain at elevated levels for some time to come.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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