The Press and Journal (Aberdeen and Aberdeenshire)
Too expensive’
Research: MPs warn against ‘triple lock’
Maintaining the pensions “triple lock” will mean pushing the state pension age above the average life expectancy for men in poorer parts of the country, MPs have warned.
The Commons work and pensions committee said the pension age would have to rise to 70.5 years-old by 2060 if the rate of annual increases was to be sustained.
It warned that would exceed the average male life expectancy in 162 neighbourhoods in Scotland and 26 neighbourhoods in England.
The committee chairman Frank Field reiterated their call for the “triple lock” – which guarantees the state pension rises by average earnings, the consumer price index, or 2.5%, whichever is the highest – to be scrapped, saying it had “done its job”.
Chancellor Philip Hammond has indicated that while the government will keep the triple lock for the rest of the parliament, it will review its future after 2020.
The committee said research commissioned from the Institute for Fiscal Studies (IFS) found if ministers were to index pensions to a “smoothed“earnings link – protecting the
“It would exclude more people from the state pension”
value of the pension when inflation outstripped earnings – it would save 0.8% of GDP a year.
That would be a real terms reduction of £15billion at today’s prices, the equivalent to 4p on the basic rate of income tax.
The IFS estimated if expenditure on pensions was to be maintained at current levels of about 6% of GDP with the triple lock still in place, ministers would have to put up the state pension age to 70.5 by 2060. The committee said that would put it above average male life expectancy in 62 neighbourhoods in Glasgow alone.
Mr Field said: “With the triple lock in place the only way state pension expenditure can be made sustainable is to keep raising the state pension age. That would exclude ever more people from the state pension altogether. Such people will disproportionately be from more deprived areas, while those benefiting most will be the relatively prosperous.”