The state pension triple lock is a guarantee from the Government that the value of the UK state pension will increase by at least 2.5 percent every year, in order to allow pensioners to retain their spending power in line with inflation.
Under the policy, the state pension amount must be increased by the greater of three figures: annual average earnings growth, inflation, or 2.5 percent. It has been in place since 2011 as a means of helping retirees have security when it comes to their pension.
However, there has been increasing speculation that the Government will not honour the triple lock this year, and instead decide to offer pensioners a smaller increase than the policy says they should receive. Based on average earnings growth, the increase in state pension is set to be 8.8 percent according to the triple lock.
This figure represents a larger increase than state pension has ordinarily seen, and it is believed that temporary factors relating to the COVID-19 pandemic are artificially inflating the percentage. Therefore, Rishi Sunak is considering not honouring the triple lock policy and increasing state pension by a lower amount.
“The Government is talking about the possibility of a particularly high increase this time because obviously earnings increased. But they’ve conveniently forgotten that for 30 years, between 1980 and 2011, the earnings link was broken.”
He explained that it meant for around 30 years, the state pension didn’t rise in line with earnings, adding: “Because of that, pensioners are now way behind on the cost of living.
“Just because one year there is an increase likely to be eight percent, is no reason to remove that guarantee. if the Government do a lower amount, they will indicate that pensioners could get £15 per week extra and the Government only says £5 a week, we will take the view that £10 a week will have been stolen from pensioners.”
He added that it would mean the “guarantee will have been broken” – adding: “There’s no other way of putting it – it’s stealing money which is due.”
He said: “There are several million pensioners whose only source of income is the state pension and any benefits which they are given. Auto-enrolment is a bit of a red herring because it only started in the last decade. It’s only now really starting to have an impact on what people will have in retirement. The vast majority of people who don’t have an occupational pension will not have benefitted from auto-enrolment.
“For many people, they are looking at the state pension as their only real source of income, and £137.50 is not enough to even buy essentials, let alone have a few luxuries now and then.
“Any fiddling with the triple lock, which is what was agreed in their manifesto and is in law – we will campaign against it. Any amount that is stolen from pensioners, we will publicise that. if pensioners were due £10 more under the existing triple lock and only get £5, then we will find the money has been stolen from pensioners.”