State Pension Stop Triple Lock Call

The Social Market Foundation (SMF) published a paper today 14 April 2020, asking the government to replace the triple lock for state pensions with something more affordable as a way of reducing the deficit which has built up during Covid-19.

The triple lock protects state pensions increases by using the higher of consumer prices inflation, wages inflation or 2.5%pa and following the coronavirus and according to the think tank, it should be changed and all generations pay their fair share to meet the costs of the pandemic.

Director Scott Corfe at SMF suggests replacing the triple lock with a double lock system which would tie increases to earnings or inflation (whichever higher),  currently the state pension is increased by the triple lock which is the highest of earnings growth, price inflation or 2.5% a year. 

Scott continues: “£20 billion could be contributed to reduce the deficit over the next 5 years.  Pensions would still rise, less quickly but would reduce the fiscal burden on the working-age population.  An annual deficit could reach £200 billion as we recover from the crisis, this would not be too much to ask”.

Comment

We should all expect higher taxation and benefits tightening when we finally make it out the other side on the coronavirus pandemic.  That said, state pensions will certainly be a political 'hot potato'.