View the article online at http://citywire.co.uk/money/article/a892780
Duncan Smith urges review of pension 'triple lock'
(Update) Former work and pensions secretary says government must reconsider expensive protection to state pension.
(Updated with Number 10 and DWP responses)
Former work and pensions secretary Iain Duncan Smith has urged the government to reconsider its ‘triple lock’ on the state pension.
Duncan Smith (pictured) resigned on Friday evening. In his resignation letter he described proposed cuts to disability benefits as a ‘compromise too far.’
Following his resignation Duncan Smith told the BBC the government needed to rethink the ‘triple lock’ on state pension rises to stop benefit cuts hitting only those of working age.
‘We have a triple lock on pensions which I was proud to do six years ago, but with inflation running at zero, we really need to look at things like this and ask “do we just keep saying it’s working age [people] who bear the brunt [of cuts],’ he said.
The triple lock has been one of the Conservative party’s key pension policies since it was introduced by the coalition government in April 2012.
It ensures the value of the state pension will rise by the highest measure of inflation, wages, or 2.5%. At the start of this parliament the government pledged to continue with the policy.
However, pressure has grown to scrap the triple lock at a time of cuts across the benefit budget.
Last year the Government Actuary department published a report which said the total cost of the policy could be ‘significantly greater’ than first thought. The report was later taken down from the government website.
The Office for Budget Responsibility has also warned that the policy risks undermining chancellor George Osborne’s commitment to reaching a surplus by 2020.
Despite criticism for the triple lock, Duncan Smith is one of the few politicians to have publicly called for it to be reviewed.
Even Labour has stopped short of saying it should be cut. Shadow work and pensions secretary Owen Smith said the party would look at pensioner benefits but added the party did not think pensioners should be a target for cuts.
‘I do think we need to look at all of these things long term, but obviously it will be for a Labour government when we get closer to the next election to look at the absolute specifics of all of those pensioner benefits,’ he said.
‘The last Labour government worked incredibly hard to raise pensioners out of poverty. We were incredibly successful in that regard … and I don’t think that they ought to be the target for cuts, just as I don’t think the disabled should be the target for cuts, there are a million other choices the government could have taken.’
A spokesman for the prime minister told Citywire that the government had no plans to change the policy and declined to comment further. 'There is no change to the government's position,' he said.
When asked for comment about Duncan Smith's assertions, a spokeswoman for the Department for Work and Pensions said that the issue was one for the Treasury to consider. 'We don't have anything to add on this,' she said.
'The triple lock is a Treasury policy anyway so we don't have anything to add.'
The Treasury was contacted for comment but has not responded.
News sponsored by:
Making the most out of Europe's potential means seeing things differently. Learn more about how BlackRock's focused approach to investing in Europe helps investors unlock the continent's vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
More from us
- State pension 'triple lock' is here to stay, says minister
- PM protects state pension from spending cuts
- Pensions: you'll need to save one third more after 2015
- Q&A: what is the state pension 'triple lock' guarantee?
- Labour to honour state pension 'triple lock' but target old age perks
- Altmann attacks 'exceptionally difficult' Duncan Smith
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.
by Robert St George on Feb 20, 2017 at 00:01