May ‘to pay if triple pension lock axed’
DITCHING the state pension “triple lock” will only save money in the short term, experts warned last night.
Theresa May has refused to guarantee that it will still be in place after the election.
The triple lock means state pensions rise at the rate of inflation, wage growth or 2.5 per cent, whichever of the three is the highest.
But pensions consultancy Hymans Robertson said that because millions of workers are not saving enough for their retirement, any shortfall must be plugged by the taxpayer.
And that will be greater than any costs of the triple lock scheme.
Chris Noon, of the consultancy, said: “The motivation to remove the triple lock and return to the former policy of double lock would be based on short-term cashflow considerations rather than sensible policy.
“The cost savings to government will be insignificant in the context of the pressure building on the state pension due to huge savings shortfalls.
“People are not saving enough for retirement. Threequarters of defined contribution savers will not be able to retire on an adequate income.
“The pressure on the state will rise as greater numbers retire with these pensions over coming years.
“Large numbers of these people will not have enough to live on.”
The 2.5 per cent underpin was added to the double lock seven years ago.
THERE has been much speculation about whether or not the Conservatives will continue with their “triple lock” pledge to protect the value of the state pension. Now one consultancy firm has said that whatever happens pensions will have to keep going up.
Whether the Conservatives stick with the triple lock or instead choose to devise another way of protecting pensions one thing is clear: they cannot abandon their commitment to retirees. Many pensioners, even after years of seeing the state pension going up year on year, are still struggling. With social care services under pressure this is even more important.
After a lifetime of working hard and paying into the system it is only fair that they can call on a decent state pension during their well-deserved retirement. It would be wrong for the Government to ignore their interests.