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State Retirement Pensions: Uprating

Question for Department for Work and Pensions

UIN 45255, tabled on 8 September 2021

To ask the Secretary of State for Work and Pensions, what assessment her Department made of the potential merits of assessing underlying levels of wage growth in 2021-22 with the impact of furlough discounted for the purposes of uprating the State Pension prior to the decision to suspend the triple-lock.

Answered on

13 September 2021

In order to consider whether it would be appropriate to use a rate of underlying wage growth, we consulted the Office for National Statistics views. The ONS published information on measuring underlying pay growth on 15 July 2021 :- “Far from average: How COVID-19 has impacted the Average Weekly Earnings data”.

The ONS identified temporary factors, called base and compositional effects, that have increased the headline growth rate in earnings above the underlying rate. There is no single accepted approach to assessing underlying growth. ONS have published a range of possible growth rates, but acknowledge these should be treated with caution.

Therefore, it would not be appropriate to use estimated underlying levels of wage growth as it would not be a robust basis by which to up-rate and there is ongoing volatility in these data.

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