Pension Triple Lock

justwantedtosay

Can someone who understands these things quickly clarify something for me?

Last year the state pension went up by 4.1%, which supposedly reflected the increase in wages from May to July 2024, announced in September. That all seems perfectly straightforward. 

But the ONS (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/september2024) says the increase for that period was 5.1% excluding bonuses and 4.0% including them, while their graph for seasonally adjusted wage growth on another page (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/timeseries/kac3/lms) has the July figure as 4.3% and September as 4.6% - I'm not sure whether these are the data release date or the date they applied to but, again, neither is 4.1%. Oddly it was the August figure that was 4.1% - conveniently the bottom of a trough.

So exactly which figure, with or without bonuses, which month, etc did they use to get 4.1% and will presumably use this year as well?

I get that it's inflation, wages or 2.5%, it's just the wages bit I'm asking about. It looks as though it is going to be the important one again this year even though wage rises are decreasing while inflation continues to increase.

Cheers

Marcon

https://www.thisismoney.co.uk/money/pensions/article-11361549/What-state-pension-triple-lock-pensioners-10-rise.html

justwantedtosay

Marcon said:

https://www.thisismoney.co.uk/money/pensions/article-11361549/What-state-pension-triple-lock-pensioners-10-rise.html

That just repeats what I wrote and doesn't explain why the 4.1% figure doesn't match any ONS figure for that date.

Dazed_and_C0nfused

justwantedtosay said:

Can someone who understands these things quickly clarify something for me?

Last year the state pension went up by 4.1%, which supposedly reflected the increase in wages from May to July 2024, announced in September. That all seems perfectly straightforward. 

But the ONS (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/september2024) says the increase for that period was 5.1% excluding bonuses and 4.0% including them, while their graph for seasonally adjusted wage growth on another page (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/timeseries/kac3/lms) has the July figure as 4.3% and September as 4.6% - I'm not sure whether these are the data release date or the date they applied to but, again, neither is 4.1%. Oddly it was the August figure that was 4.1% - conveniently the bottom of a trough.

So exactly which figure, with or without bonuses, which month, etc did they use to get 4.1% and will presumably use this year as well?

I get that it's inflation, wages or 2.5%, it's just the wages bit I'm asking about. It looks as though it is going to be the important one again this year even though wage rises are decreasing while inflation continues to increase.

Cheers

You are mixing up two different things, that why it doesn't make sense.

"Last year" the State Pension triple lock would have been based on earnings (if that was the relevant element of the lock) to July 2023.

The July 2024 earnings would be the basis of the increase this year.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81333819/#Comment_81333819 quoted a piece in The Times, stating that the originally-shown 4.0% figure had been revised to 4.1%, presumably after the September 2024 bulletin was published.

I presume the KAC3 data series shows May to July in August, even though it's not in the published bulletin until September....

justwantedtosay

Dazed_and_C0nfused said:

You are mixing up two different things, that why it doesn't make sense.

"Last year" the State Pension triple lock would have been based on earnings (if that was the relevant element of the lock) to July 2023.

The July 2024 earnings would be the basis of the increase this year.

Sorry but I've no idea how you reached that conclusion from what I wrote...???

Yes last year it was 4.1% due to wages but, as I said, none of the ONS figures match that 4.1 figure. I know it will be this year's figure that gives next April's increase - how else could it be done?

Dazed_and_C0nfused

justwantedtosay said:

Dazed_and_C0nfused said:

You are mixing up two different things, that why it doesn't make sense.

"Last year" the State Pension triple lock would have been based on earnings (if that was the relevant element of the lock) to July 2023.

The July 2024 earnings would be the basis of the increase this year.

Sorry but I've no idea how you reached that conclusion from what I wrote...???

Yes last year it was 4.1% due to wages but, as I said, none of the ONS figures match that 4.1 figure. I know it will be this year's figure that gives next April's increase - how else could it be done?

Because this year is 2025.  Last year is 2024 and next year is 2026.

But I suspect @eskbanker has answered what you really wanted to know.

justwantedtosay

eskbanker said:

https://forums.moneysavingexpert.com/discussion/comment/81333819/#Comment_81333819 quoted a piece in The Times, stating that the originally-shown 4.0% figure had been revised to 4.1%, presumably after the September 2024 bulletin was published.

I presume the KAC3 data series shows May to July in August, even though it's not in the published bulletin until September....

Thanks. 

The revision would explain it. I did try to find the answer, obviously not hard enough.

So it's the Including Bonuses figure announced in September I have to look out for, not that it won't be mentioned on the news in connection with the triple lock. I was just trying to estimate what to expect. Obviously I'm hoping for anything but the inflation rise as that's not really a rise at all, probably a reduction in real value for someone relying on the state pension in fact.

SnowMan

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

Look at the August 2024 earnings figure on the chart which is the 3 month April to July average of 4.1% (it was revised from an earlier 4%)

justwantedtosay

Dazed_and_C0nfused said:

justwantedtosay said:

Dazed_and_C0nfused said:

You are mixing up two different things, that why it doesn't make sense.

"Last year" the State Pension triple lock would have been based on earnings (if that was the relevant element of the lock) to July 2023.

The July 2024 earnings would be the basis of the increase this year.

Sorry but I've no idea how you reached that conclusion from what I wrote...???

Yes last year it was 4.1% due to wages but, as I said, none of the ONS figures match that 4.1 figure. I know it will be this year's figure that gives next April's increase - how else could it be done?

Because this year is 2025.  Last year is 2024 and next year is 2026.

But I suspect @eskbanker has answered what you really wanted to know.

Ah, I see the level of pedantry you sank to. Surely it's clear I meant 'last time' - based on last year's figures - and wasn't confusing years.

And yes, it was great to have a proper answer from eskbanker.

justwantedtosay

Can I switch this off now I have the answer?