Morgan Schondelmeier

Time to ditch the pension triple-lock for good

Perhaps it’s finally dawned on the government that they have an intergenerational inequality problem on their hands. The decision to suspend the pension triple-lock for one year to avoid an 8 per cent increase to the state pension would suggest so. Asset wealth is already excessively concentrated in the over-55s. To even this spendthrift government, a massive bump in pensions while the rest of the economy languishes is a step too far.

But that’s exactly what happens every year anyway under the triple-lock. The policy means that even when the rest of the economy stagnates, pensioners receive a boost. It is a feature of the system, not a bug, which came into place as part of the coalition in 2010 and has quite clearly run its course.

Our broken social care system lets down those most in need

A guaranteed increase of at least 2.5 per cent, nevermind bumper years where we experience higher inflation or a 2.5 per cent earnings uptick, has seen pension pots steadily rise, while general growth remains relatively flat. Just look at 2015-16, when wages growth totalled a measly 0.6 per cent and inflation topped out at 1.2 per cent – pensioners were guaranteed an increase far surpassing anything their working compatriots received. I can only hope they spent the extra money on local businesses, what with not having to pay for bus fares, TV licences or fuel duty.

What was once a welcome and necessary reprieve from pensioner poverty has turned into a Ponzi scheme. It’s a myth that whatever pensioners paid during their working years is going to fund their lifestyle now. In fact, it’s the working population now that is supporting the pensioners of today.

The UK is not alone in its demographic crisis. As former Health Secretary Jeremy Hunt pointed out yesterday in the Commons, an ageing population with decreased birth rates is plaguing much of the Western world.

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