Personal Account

The Tories will soon regret their triple lock promises, which were designed in a different era

When the Tories first committed to the state pension triple lock things were a lot simpler. It was 2010, the Bank Rate was 0.5pc and inflation was a workable 3.3pc.

During the years that followed, the economy remained placid, inflation did not creep above 4.5pc and the Bank Rate eventually fell to a record low of 0.1pc.

As inflation charges towards 13pc, the Conservatives will soon rue the day they made such a costly promise to their loyal older voters.

The triple lock guarantees that the state pension will not lose value in real terms. It means that every April pensioners receive a percentage pay rise in line with the highest of inflation, average earnings growth or 2.5pc.

The Bank of England also aims to keep inflation below 2pc, meaning that pensioners are often guaranteed an inflation-busting pay rise.

Seven times in the past 12 years the state pension has risen by more than inflation thanks to the triple lock. Yet now that inflation has taken off, the true cost of the Government’s guarantee is becoming clear.

Make no mistake, the triple lock will save millions of pensioners from poverty over the coming years as unaffordable energy bills devour their income. However, it also risks fuelling a generational wealth divide.

While workers have been told not to ask for a pay rise, pensioners wooed by the triple lock will be expecting one. And while the benefit will rise by 10pc for perhaps two years on the trot, workers are expected to suffer real-terms pay cuts of perhaps 3pc or 4pc.

Volatile economics over the past year or two have also exposed imperfections in the triple lock system. April’s state pension increase will only bring income up to match today’s rampant inflation and will come too late for many older people who need the money now.

The promise has already been broken once, which makes it easier to brake it again. As chancellor, Rishi Sunak suspended the pledge when the pandemic distorted earnings figures. Instead, pensioners this year received a 3.1pc rise, rather than the more than 8pc they were due.

Perhaps it is time the Tories accepted that the triple lock is unsustainable. It will cost an additional £24bn and hand pensioners an extra £2,000 each over the next two springs.

Liz Truss, favourite to be the new prime minister, last week confirmed to The Daily Telegraph that she was committed to honouring the pledge, which was reiterated in the 2019 Tory election manifesto.

When workers face real- terms cuts to pay, dishing out such a huge blanket rise is looking harder and harder to justify.

Many pensioners will rely on the triple lock to pay their bills over the coming years, and I’m not suggesting it should be scrapped immediately. But surely there is a better way to distribute public money?

The Tories have backed themselves into a corner with the triple lock promise. Keep their word and they will surely have to increase an already unacceptable tax burden. Break it and their older voters will struggle to forgive them before the next election.

While workers have been told not to ask for a pay rise, pensioners will be expecting one