PENSIONS BOOST!
PM protects triple lock
BORIS Johnson yesterday promised millions of OAPs that the triple lock on state pensions will continue.
The guaranteed pension increase of at least 2.5 per cent a year will still be paid despite the nation’s battered finances in the wake of the Covid-19 pandemic.
The Tories had pledged in their 2019 election manifesto to keep the pension triple lock.
The Prime Minister told the Commons: “We are going to meet all of our manifesto commitments.”
Under the system, the state pension increases by whichever is highest out of growth in wages, inflation as measured by the Consumer Price Index or 2.5 per cent.
Last month, it increased by 3.9 per cent to match the rise in average earnings seen by UK workers in July last year.
The coalition government introduced the policy in 2010, but the cost of it has ballooned and different Chancellors since have come under pressure to scrap it.
Current incumbent Rishi Sunak is now being urged to halt the policy to make up for financial losses incurred by supporting workers and the economy during the coronavirus lockdown.
The Treasury has estimated that Britain will end up with a spending bill worth £300billion by the end of the 2020-21 financial year next April – a sharp rise on the £55billion forecast in the March Budget.
Replacing the triple lock with a “double lock” that removes the 2.5 per cent element could save £20billion over the next five years, the Social Market Foundation think-tank estimates.
Keeping the triple lock in place may also pressure the Government to raise the state pension age. But the charity Age UK argues that axing the triple lock could make hundreds of thousands of pensioners worse off.
And the Pensions Policy Institute has estimated that around 700,000 people could fall into poverty by 2050 if it is scrapped.
The basic state pension currently stands at £134.25 per week, though the exact payment is dependent on an individual’s National Insurance contributions.