Indexation
Automatically adjusting wages, pensions or rents in line with a price index.
2 min read · Reviewed September 2026
In plain words
Indexation links a payment to inflation. A pension indexed to CPI rises by the same percentage as the price level, preserving its real value. Indexation protects recipients but can build inflation into wage and rent expectations, making it harder to bring down.
Frequently asked questions
Are UK pensions indexed to inflation?
The UK state pension is protected by the "triple lock" — it rises by the highest of CPI inflation, average earnings growth, or 2.5%. Private and public sector pensions vary: some are CPI-linked, some RPI-linked, some have caps.