Pension experts have welcomed the Queen’s Speech for hinting that the government’s triple lock will continue until 2020.
Earlier today the Queen said: ‘Measures will also be brought forward to secure the real value of the basic state pension, so that more people live in dignity and security in retirement.’
Pension experts believe this means the triple lock- which pledges to increase the state pension by inflation, wages or 2.5%, depending on which is higher- will be protected until 2020.
Steve Bee (pictured), chief executive of Jargonfree Benefits, said that there was nothing else that such a statement could indicate, and praised the speech for announcing no further tinkering with pension policy.
‘It can’t mean anything else, it has to be,’ he said. ‘It was a big policy for the coalition government, and they are not going to increase the state pension outside of the current limits set by the triple lock, so it probably means a continuation of the triple lock.’
‘The really good news is that the speech didn’t include anything else about pensions in it, we could do without further changes to the system at the moment.’
Andrew Tully, pensions technical director at Retirement Advantage, agreed with Bee that the Queen’s statement indicated another five years of the policy.
‘I think that what it means is that the triple lock will continue to apply for the duration of the parliament,’ he said.
‘The triple lock was only guaranteed to run until 2015 I think, and no-one had committed to continuing it for longer until the run-up to the election. In the run up to the election there were pledges, but it hasn’t been set out in legislation until now.’
The triple lock has not been enshrined in law, however.
Hargreaves Lansdown head of pension research Tom McPhail cited the cost implications of such a measure.
‘We had that pre-election commitment to preserve the triple lock at least for the duration of this parliament,’ he said.
‘There’s a widespread recognition that whilst the triple lock is and has been valuable in raising the overall living standards of pensioners, in the very long term it would become ruinously expensive if you preserved it in perpetuity.’
The Queen’s speech also confirmed a bill to ensure that the government could not increase income tax, national insurance or VAT until after the 2020 election.