Helen Nugent

Scrapping the pension triple lock would be bad news for pensioners – and the Tories

The wrangling over key policy areas in the upcoming general election has begun in earnest. If you’re already tired of the political argy-bargy, don’t worry, there’s only, ahem, six weeks to go. Stay with me though, because there’s one topic in the personal finance arena that really, really matters. The triple lock state pension guarantee. With the Prime Minister understood to be considering replacing the triple lock with a less generous double lock, and the Labour Party on record saying it will keep the triple lock until 2025, this issue goes to the heart of the parties’ attitude to pensioners. Meanwhile, the Liberal Democrats said in their 2015 manifesto that it should be written into law. What is it? Introduced by the coalition government seven years ago, the triple lock is a guarantee to increase the state pension every year by the higher of inflation, average earnings or a minimum of 2.5 per cent. It was launched to protect pensioners from meaningless increases, such as the much-derided 75p a week rise in 2000, and to make sure their income was not eroded by the gradual increase in the cost of living. It may seem like a small amount of money but it became a pressing matter following Margaret Thatcher’s decision to abolish the state pension earnings link in 1980. This meant that pensioner incomes had, for many years, risen at a derisory rate. And there’s no doubt that the triple lock has benefited pensioners. The Institute for Fiscal Studies says that between April 2010 and April 2016, the value of the state pension increased by 22.2 per cent, compared with growth in earnings of 7.6 per cent and growth in prices of 12.3 per cent over the same period. How much does the triple lock cost central government? This varies but Office for Budget Responsibility projections suggest retaining the triple lock could cost £15 billion more than earnings indexation by 2060.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in