DWP state pension increase falls short by £11.50 a month as earnings growth dips

Pensioners are set to receive £11.50 less per month than was originally expected due to the newly released earning figures dropping down to 4.5%. The UK state pension increases annually under the triple lock system, which is based on inflation, earnings or 2.5%, whichever is highest.

Each year's triple lock increase is based on the consumer price inflation figure from September of the previous year, and earnings growth over three months from May to July. Currently, inflation is around 2%, while in the three months to May this year, earnings rose much faster at 5.7%.

As the earnings figure is higher, it's likely to apply when the 2025 increase is set. Today saw the release of earnings figures for the three months to June which saw a drastic drop to 4.5%.

Today, the full new state pension pays a maximum of £11,502 a year. An increase by 5.7% would have lifted it by £655 to £12,157 a year. However, a 4.5% increase in earnings would only raise the new state pension by £517 to £12,019. This would result in millions receiving £138 less on the new state pension than they had anticipated, a monthly loss of £11.50.

Labour leader Keir Starmer has committed to maintaining this widely supported uplift mechanism for the entire five-year term of the current Parliament. The triple lock has faced criticism in recent years as it has resulted in two significant consecutive increases for state pensioners.

Pensioners received a 10.1% increase In April 2023 based on inflation, but this April only saw an 8.5% increase, in line with earnings growth. This has helped millions cope with the cost-of-living crisis and mitigated the impact of former PM Rishi Sunak's controversial decision to suspend the triple lock in 2021.

Helen Morrissey, head of