Why a triple lock farewell is a wake-up call to us all

SO IT looks like it’s goodbye to the state pension triple lock. For over a decade, pensioners have been guaranteed that the state pension would rise each year by the rate of inflation, wage growth or 2.5 per cent – whichever is highest.

The Conservatives vowed in their 2019 manifesto to preserve the triple lock through this Parliament as well.

The policy was designed to offer pensioners a morsel of security and confidence that the bedrock of their retirement income would not be eroded over time.

However, now the policy is under review it is highly unlikely to come out unscathed.

The question is not whether the Chancellor will tamper with the triple lock. Rather, it is whether he is poised to do so with a key – to open and then close it again in future years – or poised with a sledgehammer to smash the lock to smithereens.

The argument for ditching the triple lock is that these are no ordinary times and therefore call for measures not usually considered.

Until now, the triple lock has resulted in a moderate state pension increase every year – rarely higher than three per cent. But if honoured this year, the state pension would rise by a hefty eight per cent or so, costing an extra £4billion.

That’s because earnings are likely to be artificially inflated by the pandemic, which depressed wages in 2020 before a surge this year.

There’s no doubt that these are not normal times. However, if the triple lock is smashed apart, it won’t be a one-off blow to the benefits afforded to pensioners.

Chiselling away at these hardearned privileges is increasingly commonplace – and started long before the pandemic.

The Government is consulting on scrapping free prescriptions for over-60s. Around 2.4million more Britons would have to pay the £9.35 charge if Ministers press ahead with plans to raise the qualifying age from 60 to 66.

Eligibility for free bus passes is gradually rising from age 60 to the state pension age. In

I’ll be shocked if there’s much left on offer when I retire

England, you already have to wait until state pension age for a free bus pass. Wales is planning to introduce similar rules.

Free TV licences for over-75s were scrapped in August last year. An additional four million pensioners are now being called on to pay the £159 levy they once got for free.

At this rate, I’d be surprised if by the time I reach state pension age there will be much left on offer at all.

I am fully aware that my National Insurance contributions are not being stashed away in an account labelled ‘Rachel’s retirement’ ready for me to claim when I become eligible.

Instead, my contributions are paying to support current retirees in the hope that the younger generation will do the same for me in the future.

So what to do? Well, I’m treating the triple-lock jeopardy as a reminder that even the most cast-iron promises can be broken. It is prudent, especially for younger generations, not to build future finances on the expectations of receiving the same Government support and benefits that have been available in the past.

That means planning more for our retirements. Easier said than done, I know. But if you did manage to boost your savings during lockdown, it may be worth sticking a wodge in your pension – many providers allow you to pay in one-off sums.

AND make sure your money is working as hard for you as you worked to earn it in the first place. Use tax relief where you can – in Individual Savings Accounts and pensions. Invest savings you won’t need to access for a good few years so that they may continue to grow.

I’ve printed off a copy of my state pension forecast, so that I can prove in future decades what I was assured I would receive. (You can check yours too at www. gov.uk/check-state-pension).

But I’ve learned from the treatment of pensioners today that arguing ‘but you promised’ is unlikely to make much of a difference.