"Average Earnings Growth" and triple lock

Grumpy_chap

But as a best guess perhaps the triple lock increase for April 2027 will be based on the earnings calculation and be in the region of 3.7%-4.1%. Does that seem right?

Based upon your post, it does appear as though the earnings figure is going to be the pertinent figure for the Triple Lock calculation for 2027 increase.

As a technical query - what, exactly, does the "earnings" metric take into account?

Is it just "earned income" on the same basis as NI contributions are determined, or is it a separate "earned income" definition?

I assume that LL rental income, interest income etc are not considered as "earnings".

Is there any adjustment for people out of work, thus having no earnings, but who wish to be in work? Is that effect already deemed to be naturally accommodated in the "earnings" data by virtue of a high proportion of available work force would depress salary increases?

Please note, this is a query on the technical definition of "earnings" in the Triple Lock calculation as it stands. Please do not veer into whether the definition of "earnings" is correct or not as that risks being political.

SnowMan

https://forums.moneysavingexpert.com/discussion/comment/82106441#Comment_82106441

I've never tried to look into but it says in their spreadsheet

These tables show the seasonally adjusted total pay, bonus pay and regular pay series for the nine sectors ("whole economy", "private sector", "public sector", "services", "finance and business services", "public sector excluding financial services", "manufacturing", "construction" and "wholesaling, retailing, hotels & restaurants").

Those categories are determined in accordance with the Standard Industrial Classification (2007) and this document gives some more information (scroll down to the average weekly earnings section)

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/methodologies/aguidetosourcesofdataonearningsandincome

As far as I understand it and I have no real knowledge here: The unemployed are excluded from the calculations. Self-employed are excluded. Hours worked are not taken into account so it's earnings per employee (not counting unemployed) that is compared (which is probably the main reason that wage inflation was negative when the furlough scheme was in place because average hours paid was lower during that period because often employees were only paid 80% of their wage). It is total earnings (historically collected through employer survey not through HMRC records) so similar but not identical to NI-able (assuming we include the lower NI threshold). Rental income/savings income is ignored.

Grumpy_chap

So, that sounds like the same "earned income" that is used in determining the maximum an individual may contribute to their SIPP.