Home Finance State Pension Triple Lock warning: Pension chief hints at reconsideration of policy

State Pension Triple Lock warning: Pension chief hints at reconsideration of policy

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State Pension is available to hard-working Britons who have given years in National Insurance contributions to the UK. In recent years, the government has offered additional protections to the sum through the Triple Lock mechanism. Under the policy, the State Pension is guaranteed an increase each year by whichever is the highest: inflation; 2.5 percent; or average earnings. 

This policy is welcomed by many who wish to see additional protections for those who have departed from the workforce.

However, there has been speculation in recent weeks that the policy could be set for change, or scrapped altogether.

Think Tanks such as the Social Mobility Foundation (SMF) have called for the government to get rid of Triple Lock to spread the cost of COVID-19 evenly between those of working and retired age.

The government, however, has reaffirmed its commitment to Triple Lock, doubling down on its reassurances that the policy is here to stay.

READ MORE: State Pension UK: Triple Lock entitlement for pensioners

“But there are consequences if average earnings fall during this year that we need to rectify in order to make sure that aspects of the law already in place cannot be set aside.”

Ms Coffey referred to the forecast which expects average earnings to fall drastically as a result of the COVID-19 pandemic.

Earnings across the country did fall significantly in April, but it is feared unemployment could also have an impact on this.

Furthermore, many people have been placed on furlough, meaning their pay has been dropped, likely to have a knock on effect for average earnings.

It is thought State Pension payments could increase by 7.6 percent between 2020 and 2022 for the same reason.

This is likely to greatly exceed the predicted average earnings growth of 1.5 percent.

When asked about the Triple Lock recently, Prime Minister Boris Johnson, said the government would “meet all manifesto commitments”.

This sentiment was echoed by Foreign Secretary Dominic Raab who told LBC there were no plans to modify the mechanism.

The Triple Lock Mechanism was first introduced in 2010 by the coalition government.

It was agreed the State Pension figure needed to significantly rise to provide retirees with more assurance after departing work.



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