State Pension protected payment Triple Lock

ben_glastonbury

I have just received my updated pension letter for April 2025 and noticed that the protected payment portion of my pension is only increasing by 1.7%. Does anyone know how this 1.7% is calculated and why the full amount of the pension is not protected by the triple lock?  
Thanks

Just realised that the 1.7% is the CP so now know how it is calculated, Does anyone know if this has always been the case or whether this is something new?I, 

QrizB

Yes, it's always been the case.

molerat

Any payment outside the basic pension has always been only CPI uprated.

Redsdad12

Under Triple Lock .. Average Earnings is based on the average of KAC3 data for May, June, July. I calculate that to produce 4.8 (M+Jun+Jul/3 ... 5.7+4.6+4.1 = 14.4 / (3). Why is the figure widely quotes as 4.1 ?

molerat

Either you or the government statisticians are doing something wrong, I know which one my money is on

eskbanker

Redsdad12 said:

Under Triple Lock .. Average Earnings is based on the average of KAC3 data for May, June, July. I calculate that to produce 4.8 (M+Jun+Jul/3 ... 5.7+4.6+4.1 = 14.4 / (3). Why is the figure widely quotes as 4.1 ?

Where have you read that such an average is used?  I can't see why it would be mathematically valid to use an average in that way and the inflation measure uses one specific month's YoY value rather than averaging multiple figures?

xylophone

https://www.thetimes.com/money-mentor/pensions-retirement/state-pension/pensions-triple-lock


The increase is worked out by the “triple lock” – a promise that the full basic state pension will rise each year in line with the highest of three factors: average earning growth figures between May to July the previous year, CPI inflation from the previous September, or 2.5%.

Average earnings figures, including bonuses, in the three months to July, grew by 4% (recently revised to 4.1%), according to the Office for National Statistics (ONS). This figure will now be used to calculate the pension triple lock and means the annual rise to the full state pension rate will be £460, taking it to £11,962.60 a year from April 2025.

eskbanker

Yes, "Year on Year Three Month Average Growth" is used, i.e. the measure is the difference between the average figures in May to July 2024 and the equivalent value for the same three month period in 2023, not an average of three YoY figures!

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/timeseries/kac3/lms/

QrizB

Redsdad12 said:

Under Triple Lock .. Average Earnings is based on the average of KAC3 data for May, June, July. I calculate that to produce 4.8 (M+Jun+Jul/3 ... 5.7+4.6+4.1 = 14.4 / (3). Why is the figure widely quotes as 4.1 ?

KAC3 is the three-month average, so the July 2024 value of 4.1% is the only one you need.