Plea for decision over ‘triple lock’ pensions

THE Government is being urged to “bring clarity” soon on the future of the state pension triple lock.

Reports suggest that a decision on the triple lock, which is used to uprate pensions, is set to be made imminently and an announcement could be just days away.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “Any decision needs to take account of the needs of both pensioners and taxpayers.

“An early decision would be welcomed as bringing clarity for everyone. The current situation, though extreme, shows the importance of reviewing the triple lock.

“It has improved the incomes of pensioners, but we need to look at whether the triple lock remains the best way to maintain the long-term value of the state pension while striking a balance between taxpayers and pensioners.”

The measure guarantees that the state pension will increase in line with inflation, earnings or 2.5%, whichever is higher.

But distortions to wages caused by the coronavirus crisis could mean an extra £3 billion pensions bill. The Office for Budget Responsibility said in July that pensioners could see their payments rise by as much as 8% from April 2022 due to the guarantee.

Final decisions on the uprating policy for pensions and welfare benefits are taken by the secretary of state for work and pensions, supported by the Treasury, through an annual uprating review.