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Not now Yes please
News UK UK Politics Pension triple lock under threat as Jeremy Hunt considers lower payments Chancellor warned against ‘wriggling’ out of promises, as he looks at tweaking payments formula
Adam Forrest Political Correspondent
Wednesday 18 October 2023 09:28 EDT
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Your support makes all the difference. Read more Chancellor Jeremy Hunt is considering making tweaks to the Tories “triple lock ” state pension promise in a bid to save up to £2bn a year.
It comes as the latest official figures show UK pensioners are in line for a bumper increase in payments, as wages outstripped inflation and rose by 8.5 per cent.
Under the triple lock – a Tory manifesto promise – payments are supposed to rise with whichever is highest from average earnings, inflation or 2.5 per cent.
But Rishi Sunak ’s government is understood to be reviewing whether the increase in pension payments could be lowered by changing the Treasury formula .
The latest wage increase was boosted by a surge in bonus payments for public sector workers. Stripping out the bonuses would mean a state pension increase of only 7.8 per cent, rather than 8.5 per cent.
A government source told The Times it was not “sensible” to factor in public sector bonuses. “It is very clear that they are distorting the figures and are not an accurate representation of real-terms pay growth. This is something that will need to be looked at carefully.”
The triple lock is being reviewed by work and pensions secretary Mel Stride ahead of an expected announcement on the form of increase at next month’s autumn statement.
The Liberal Democrats work and pensions spokesperson Wendy Chamberlain warned Mr Hunt and Mr Sunak not to “row back” on their promise – saying anything less than the maximise rise would be a “disgrace”.
To row back on the triple lock would be another in a long list of callous Conservative party broken promises,” she told The Independent . “The triple lock must be maintained and pensioners must be given the money that they deserve after their years of service.”
Work and pensions secretary Mel Stride reviewing triple lock (PA Archive) The SNP’s social justice spokesperson David Linden said it was “incredibly alarming that the triple lock is once again under threat from this UK government” at a time when bills, food and everyday goods continue to soar.
He added: “Unlike Rishi Sunak and Sir Keir Starmer, the SNP is committed to the triple lock, and will always fight to protect pensions from Westminster cuts.”
Caroline Abrahams, charity director at Age UK, said the government had promised pensioners “that it will abide by the triple lock next year it should keep its word, and not try and wriggle out of its commitments”.
Mr Sunak told the Commons last month that he remains committed to the triple lock on state pensions – but swerved calls to guarantee it will feature in the next Tory manifesto.
The future of the triple lock appeared in further doubt after Labour ’s deputy leader Angela Rayner joined Mr Sunak in refusing to say whether the measure would stay after the next election.
Ms Rayner said the party will “look at” the pensions triple lock in the run-up to a general election, but would “not make unfunded spending commitments”.
Mr Stride, meanwhile, admitted to ITV News in September that the triple lock pension promise is not sustainable, saying: “It seems to me that it does become unsustainable in the long-term.”
The respected Institute for Fiscal Studies (IFS) think tank has estimated that has said that an 8.5 per cent increase in pension payments would cost £2bn more than what the government has budgeted for in 2024/25.
It comes as Mr Hunt received a blow in his bid to drive down stubbornly-persistent inflation, with the latest figures showing it remained at 6.7 per cent last month.
Analysts had predicted a slight decrease. Easing food and drink price rises were offset by higher petrol and diesel prices for motorists. Mr Hunt said inflation “rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year.”
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