What the State Pension triple lock could mean for your retirement

Happy senior couple walking on beach

You might have been dreaming about retiring for many years. Perhaps you have big travel plans or can’t wait to spend more time with your children and grandchildren.

However, the cost of living crisis that the UK has been experiencing since late 2021 means your carefully planned retirement savings may need to stretch further than you expected.

Indeed, research by Standard Life has revealed that 14% of retirees aged over 55 have returned to work to boost their income.

Happily, the State Pension increased by 8.5% from 6 April 2024, as part of the government’s ongoing commitment to the triple lock. This represents the second-biggest State Pension increase on record.

Read on to discover how you could benefit from the triple lock and learn two important factors to consider now that the State Pension has increased.

The State Pension triple lock means you could receive more from the government each year

The State Pension is a regular payment from the government that most people can claim when they reach their State Pension Age, which stands at 66 in the 2024/25 tax year (rising to 67 by 2028).

The amount you’ll receive depends on how many “qualifying years” you have on your National Insurance (NI) record. A qualifying year is one in which you’ve paid sufficient National Insurance contributions (NICs) or received National Insurance credits. You need 10 qualifying years to receive any State Pension, and 35 qualifying years to benefit from the full amount.

In 2010, the Conservative-Liberal Democrat coalition government introduced the triple lock to ensure that the State Pension kept pace with the rising cost of living and the working population’s income.

The triple lock means that the State Pension usually rises every April in line with the highest of:

  • Inflation, measured by the Consumer Prices Index (CPI) in September of the previous year
  • The average increase in wages around the UK from May to July of the previous year
  • 2.5%.


The triple lock was suspended in 2021, after the return to work following Covid-19 lockdowns skewed wage growth figures. It was then reinstated on 6 April 2023.

Under the triple lock system, the State Pension was increased by 8.5% on 6 April 2024, in line with wage growth. You could now receive:

  • £169.50 a week for the full, old basic State Pension (if you reached State Pension Age before April 2016). This is a weekly increase of £13.30.
  • £221.20 a week for the full, new flat-rate State Pension (if you reached State Pension Age after April 2016). This represents a weekly uplift of £17.35.


These changes could mean an extra £700 a year if you claim the full, old basic State Pension, and around £900 more if you’re on the full, new State Pension.

However, it’s worth looking closely at some key considerations if you receive the State Pension.

2 often-overlooked factors to consider if you benefit from the triple lock

1. Your Income Tax liability could rise

Each year, you have a Personal Allowance, which is the amount of money you can earn – including your State Pension – before you start paying Income Tax. This threshold has been frozen at £12,570 since April 2021.

The 8.5% increase in the State Pension equates to an annual income of £11,502 – just under the Personal Allowance amount.

So, if you supplement your State Pension with other income, such as from a private pension or from rental properties, you might see your Income Tax liability rise this year.

Indeed, MoneyWeek recently reported that 650,000 more pensioners will have to pay Income Tax for the first time from April 2024 as a result of the triple lock.

2. You could benefit from greater financial opportunities in retirement

While it’s worth considering the potential tax implications of a higher State Pension, you could also enjoy greater financial opportunities thanks to the triple lock.


Having more disposable income could allow you to fulfil your retirement dreams or upgrade your lifestyle.

For example, you might decide to treat your family to a special day out, or take up a new hobby.

However you choose to spend your money, an increase in your State Pension may offer you a little more financial freedom – especially if your retirement income has been unexpectedly stretched due to the current higher cost of living.


If you have sufficient income to live a comfortable retirement lifestyle, you might choose to save the additional State Pension you receive. For instance, topping up your emergency fund could help you feel prepared for unexpected expenses.


While it may be reassuring to keep some of your surplus State Pension income in cash savings – especially if savings interest rates look attractive – inflation could diminish the real value of your cash over time.

For example, the inflation calculator on This is Money shows that a holiday you paid £3,000 for in 2014 would cost you £4,089.58 today.

With this in mind, you could consider investing your additional State Pension income.

While investing is unlikely to deliver huge returns overnight, taking a long-term approach could potentially allow you to benefit from greater returns than you may receive from cash savings.

If you’re new to investing or you’re typically risk-averse, a financial planner can help you build an investment portfolio that aligns with your financial goals.

Professional advice could help you make the most of your retirement income

If you’re uncertain about how to make the most of your retirement income, a financial planner can take a holistic view of your wealth and help you create a strategy for spending, saving, and investing, that aligns with your long-term goals.

This might include:

  • Making the most of uplifts like the State Pension triple lock
  • Utilising tax allowances and exemptions
  • Building a diversified investment portfolio that effectively balances risk
  • Using cashflow modelling to provide a clear picture of your retirement income needs.


Receiving ongoing professional advice could also help to improve your financial and emotional wellbeing.

Email us at [email protected], or call 01273 076 587, to find out how we can help.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate cashflow planning or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Workplace pensions are regulated by The Pension Regulator.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

About the author
Oliver McDonald
Oliver McDonald
Oliver is the managing director and independent financial adviser at Engage Wealth Management.
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