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Theresa May wants to keep pension 'triple lock'

Conservatives debate whether to follow Labour and commit to maintaining expensive 'triple lock' promise protecting state pension. 

 
Theresa May wants to keep pension 'triple lock'

The Conservative party is considering keeping the state pension 'triple lock' in its manifesto for the June general election. 

Labour has made the triple lock, which increases the value of the state pension by the highest of prices, earnings or 2.5%, a key promise in its election campaign. 

A recent report by John Cridland commissioned by the government into the state pension recommended that the triple lock should be dropped in the next parliament in order to ensure 'fiscal sustainability'.

Former pensions minister Ros Altmann has also suggested the policy should be dropped, and proposed a 'double lock' which would see the government drop the promise to keep pensions rising by 2.5% but maintain the link to earnings and inflation. 

Now prime minister Theresa May (pictured) is considering ignoring critics of the triple lock due to worries that it may help Labour appeal to older voters, The Times reports. 

One source told the paper the party was debating whether the fact inflation and earnings are both forecast to rise above 2.5% in the immediate future meant there was no point in dropping the final part of the promise.

'It’s a matter of pretty intense debate about whether to include it in the manifesto,' they said. 'On one hand it is politically costly and doesn’t actually save any cash. On the other, it’s clearly a nonsense.'

Former work and pensions secretary Stephen Crabb yesterday said the government should keep the triple lock until 2020, as promised in the 2015 general election manifesto.

'But the case for re-examining it after that is obvious,' he said. 

16 comments so far. Why not have your say?

Anonymous 1 needed this 'off the record'

Apr 26, 2017 at 13:37

All of those who are recommending dropping the "Triple Lock " are on Final Salary Government Pensions funded by the likes of me who are not. My idea is if the "Triple Lock" is dropped those Final Salary , Index Linked, Gold Plated Government Pensions must also be dropped .

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jeffian

Apr 26, 2017 at 17:54

I'm a recent recipient of the state pension but it does not make that much difference to me either way and I wouldn't presume to comment other than say that the triple lock is quite a big deal if you are reliant on the state pension to a greater or lesser extent. However, what I think the Govt should look at it is the 'Universal Benefit' principle which hands out things like the Winter Fuel Allowance (started out as a one-off bribe by Gordon Brown and seems to have stuck), free travel, free tv licences etc whether they're needed or not. Cutting these out and giving them solely to those who need them would go some way to solving the problem in the short term.

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Michael Stevens

Apr 26, 2017 at 17:56

M Ps should drop their Defined Benefit Pension Scheme from !st April 2020.

Replace it with a Money Purchase scheme. Maximum Tax payer contribution of 8% of salary

The Taxpayer can no longer afford to support D. B. schemes..

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Codger

Apr 26, 2017 at 18:22

I agree that no government should make open-ended commitments on taxes, spending or pensions.

But to put things in perspective, this triple lock only applies to the basic state pension, which for the vast majority of pensioners is £132 per week i.e. A quarter of average earnings. It does not apply to any additional state pension or to any increase you get from delaying your pension.

Also, the government recently linked the pension increases to cpi instead of rpi, which will probably save more than the triple lock costs.

I would suggest that the winter fuel allowance should only become payable when someone reaches state pension age and that it is made taxable.

Bus passes and free tv licences are probably too trivial to worry about!

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GW

Apr 26, 2017 at 19:00

the annual cost of pensioner benefits (free tv licence, free bus travel and winter fuel allowance) is estimated at being at least £5 billion per year. I am against full withdrawal as that hurts the poorest the most but means testing seems sensible with the proviso the savings are ring-fenced and redirected towards the areas most in need e.g. NHS and care funding costs as these will again benefit pensioners the most.

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GW

Apr 26, 2017 at 19:02

re triple lock: removing the 2.5% increase is sensible as still maintaining inflationary increase but will politics get in the way?

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dominic lloydsbod

Apr 26, 2017 at 21:58

re jeffian's very sensible comments, entirely agree about Winter Fuel allowance and over 75s TV licence concession- bonkers as universal benefits. Means testing has significant transactional costs which will reduce benefits to the Exchequer from doing so; but it should be a lot less controversial than removing the triple lock, which as the article notes is unlikely to generate much if any revenue in the next Parliament. Easier to guarantee it until 2022 but promise full review in 2020.

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john vandermark

Apr 26, 2017 at 22:24

I wouldn't be surprised that those recommending getting rid of the Triple Lock have their hearts truly in remaining in the EU - the Blighters!

For heaven's sake, let's keep things in proportion - we need the pensioners vote like there's no tomorrow, for Christ Sake!!

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jeffian

Apr 27, 2017 at 09:00

Codger says: "I would suggest that the winter fuel allowance should only become payable when someone reaches state pension age and that it is made taxable.

Bus passes and free tv licences are probably too trivial to worry about!"

Not trivial at all! My wife and I - who don't need it - have both benefited since the age of 60 from London's 'Boris Pass' which is worth up to £9.50 a day in the central area (£12 if outer areas included). The subject was analysed by the independent Factchecker site back in 2012 - 5 years ago - and this was their conclusion then -

"Conclusion

While not all of the figures are readily available, the statistics on Winter Fuel Allowance, free TV licenses and free bus passes support a costing of at least £4 billion.

The amount that could be saved by restricting these benefits obviously depends on the policy. A Winter Fuel Allowance tax introduction for basic-rate payers and abolition for high-rate taxpayers is estimated to save £250 million alone. Meanwhile restricting the benefit to only those on Pension Credit, as suggested by the IFS, could save in excess of £1.4 billion."

Support those who really need it but don't try to bribe the 'grey vote'. Hopefully we're a bit more realistic and understanding than that. We need to close the deficit and I'd rather it is done transparently and fairly rather than the sort of sleight-of-hand tax increases such as the changes to dividend tax and Probate fees which seemed more like Gordon Brown's financial chicanery than anything you would expect from a Conservative Government.

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George W

Apr 27, 2017 at 10:08

I agree with Codger.

The so-called "triple lock" only applies to the basic state pension. Those of us who were prudent and paid into the state second pension/SERPS during our working lives are now being penalised. In April, my SERPS increased by 1%, in line with CPI (not RPI, which is usually at least 1% higher than CPI). As a result, the "total" increase in my state pension this year is only 1.8% - far below the 2.5% guaranteed by the so-called triple lock and well below the rate of inflation, however it is measured!

I suppose that I am fortunate insofar as I have a decent state pensions. Those who think we are "paid" too much for a lifetime of work, should remember that the older generation, many of whom endured great hardship, including fighting for the freedom we enjoy today, took responsibility for their own future and contributed to their state pension by making sacrifices during their working lives - something some of the younger generation should perhaps think about!

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GW

Apr 27, 2017 at 10:36

George - not that I could ever be considered a voice for the younger generation; too many greys for that, but the debate is not around respect for our war veterans. The vast majority of pensioners did not fight for our freedom in wars but have enjoyed many benefits that young people will simply not be privy to including: final salary pensions, large house price increases, affordable housing, a state pension at 65 or before and job security / jobs for life / no zero hour contracts. A large number simply do not need the free gifts the government bestows on them and it costs our stretched economy several billion pounds per year. Means testing allows people to keep them that need it and saves valuable money that can be better put to use elsewhere. Only politik or or a misplaced sense of entitlement would deny this to be the case.

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Thrugelmir

Apr 27, 2017 at 20:09

Triple lock would only have remained in place until 2020. In effect a two year extension by committing now. Keeps the election debate focused. Other changes to pension taxation could recoup some of the cost as well. Redistribution in other words.

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Dennis .

Apr 29, 2017 at 09:45

My wife and I are both over 60 and have never bothered to get a bus pass. However we live in a rural area and the only people that use the bus are older people who can no longer drive or can't afford to run a car. For them the bus is a lifeline so there is more to it than just saving a few £.

Incidentally don't forget the £10 Xmas bonus that we still get which was launched in 1972 and represented mote than a Week's pension (£6.70 then.

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Dennis .

Apr 29, 2017 at 09:50

Anyone saying that the young have a raw deal compared with their elders should ask themselves "would I prefer to be born now or in say 1950?"

Sure we have had low house prices and pensions etc but the young will benefit from medical and technological advances long after we are gone and that will probably make up for a lot of what we as elders value.

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George T Payne

Apr 29, 2017 at 10:43

I think the triple lock is eminently suitable for the future . There has been a dip in inflation over the last eighteen months or so , and pressure on wages since 2008, but now the key features of our economy seem to be moving back toward what they were pre 2008 crash . Most likely wages and inflation will increase until 2020 bringing this pension strategy back in balance with historical norms . I believe it to be the most satisfactory of modern pension management strategies to slowly increase Britain's basic pension levels and ensuring an intention to try and match pensions of other European countries . With regards to pensioners with additional private pensions , it would seem unfair to punish them for being carful with savings when they were working , saving for a better life than state pension can provide . It was their private taxed earnings they worked for then , and some experiencing some hardship at that time to provide for the future . It would be perceived that their hard earned money was now being stolen away from them and the added security they paid for from wages was wasted money because of selectively deducting state pension . It may be reasonable to examine those with millions of pounds but i would think that it would not be cost effective

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cat in the crypt

Apr 29, 2017 at 22:05

@Dennis

To quote GBS

Youth is wasted on the young

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