Pension guarantee ‘should be scrapped’

The triple- lock introduced by the Coalition guarantees the state pension rises by a certain level every year.

But the Commons Work and Pensions Committee said the policy would worsen an economy which was already heavily “skewed” towards baby boomers and against the younger “millennial” generation, and it should be axed by 2020.

Millennials, born between 1981 and 2000, face being the first generation in modern times to be financially worse off than their predecessors, according to the report.

Frank Field, chairman of the committee, said: “Home ownership, taken as a given by many in my generation, is out of reach for too many young people.

“While tightening their belts, they are being asked to support a group that has fared relatively well in recent years.

“No party has been immune to chasing the pensioner vote, but at what cost to future generations?

“Politicians of all stripes must accept some responsibility for these trends, and we must act together now to address them.”

The triple- lock guarantees that the state pension rises by a certain level, which means it increases annually by the highest of average wages, inflation, or 2.5%.

But the committee’s report said: “The triple-lock is inherently unsustainable.

“In the absence of reform the state pension would inevitably grow at a faster rate than the rewards of work and would account for an ever- greater share of national income.

“In particular, we find no objective justification for the 2.5% minimum increase.”

St e v e We b b, a former pensions minister who is now director of policy at pension provider Royal London, said the triple lock was created to reverse “30 years of decline in the value of the state pension”.

He said: “That job is not yet done. The UK still has one of the lowest state pensions in Europe.

“It is important not just to look at one element. The system has been made more sustainable by increases in state pension age and by the new flat rate state pension.”

A spo k e s m a n for the Department for Work and Pensions said: “We want to ensure economic security for people at every stage of their life, including retirement.

“We are committed to the triple lock which is protecting the incomes of millions of pensioners.”

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