State pension triple lock ‘will be broken’ says Halligan in June
Make the most of your money by signing up to our newsletter for FREE now
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
Former pensions minister Steve Webb has warned this week that any plans to suspend the triple lock could be thwarted without tabling an amendment to change and winning the vote of MPs. He warned that the Government is legally required to raise the state pension payment each year by the highest of 2.5 per cent, inflation or average earnings. This has sparked concern from many, however, as average earnings rose nearly nine percent according to the Office for National Statistics. Given that many younger taxpayers have endured unemployment or wage reductions during the pandemic, making them pay for the increase could be deemed unfair.
This has led to speculation that Chancellor Rishi Sunak could either strip out the effects of the pandemic on average earnings or convert the triple lock into a double lock to prevent such a big rise.
One senior MP told The Telegraph: “A huge rise would be unjust and we must have an exception.”
However, Caroline Abrahams, charity director at Age UK, said that the UK’s pension isn’t as generous as other countries and therefore the triple lock should be maintained.
The expert also said many will be concerned that the changes will be permanent rather than temporary.
She said there was a “copper-bottomed argument for keeping the triple lock now and far into the future”
State pension news: Sunak could suspend the triple lock (Image: getty)
State pension news: An expert warned the change could be permanent (Image: getty)
Ms Abrahams added: “It is not surprising that some policymakers are arguing for a different approach on a one-off basis.
“However, it’s asking a lot for older people to believe that any scaling back of the triple lock would only be temporary, rather than permanent.”
Jan Shortt, general secretary of the National Pensioners’ Convention added that almost two million pensioners were living in poverty, including 1.1 million in severe poverty.
She said: “The triple lock is a manifesto promise and they should keep that promise. They should also do what we have consistently asked them to do, which is to sit around the table and have an honest debate about pensions and the future of pensions.”
Analyst at AJ Bell, Tom Selby, told Express.co.uk earlier this month that the triple lock cannot be maintained.
State pension news: The UK Treasury (Image: getty)
He said: “The triple lock cannot be maintained as it has been applied over the past ten years or so.
“Historically the Government has used average earnings in the three months up until July as the figure to use for triple lock.
“Because of what’s happened with the lockdowns and how that affected earnings last year and the subsequent bounce back this year, we are almost certainly going to see a big spike for that average earnings figure.
“A lot of economists are expecting that figure to stand at about eight percent, which could cost the Chancellor anywhere up to around £3billion compared to what they thought they were going to spend.”
Capital gains tax: Rishi Sunak could hit landlords with huge bills [INSIGHT]
Sunak could hike National Insurance: ‘Take money off people’ [ANALYSIS]
State pension: Sunak could launch ‘double tax assault’ [INSIGHT]
State pension news: The UK pension is less than many countries in Europe (Image: getty)
State pension news: How long it would take you to become a pension millionaire (Image: getty)
However, many retirees have warned Chancellor Sunak against changing the triple lock.
Ian Forbes, 68, from Glasgow, said it would be “grossly unfair” for the Government to target pensioners to save money by deviating from the triple lock.
He told the Telegraph: “They seem to be going out of their way to target us without giving a comprehensive explanation as to how they will reduce costs elsewhere and tackle debt in other ways. Pensioners are a soft target and Rishi Sunak has not come out with any other solutions.”
Peter Macdonald, 63, from Wiltshire, added: “People say it wouldn’t be fair to the young, but that is nonsense.
“My wife had to save up for a month to be able to afford a microwave when we were young. It’s no sob story, but people of the same age today have an easier life.”