The Triple Lock on State Pensions has been confirmed and will include a 2-clause bill which will address the technical aspect of Triple Lock calculations in 2021/2022.
As commented earlier the latest inflation figures average earnings contracted by 1% year on year in the period May-July. This sets one of the 3 elements of the pensions Triple Lock, an increasingly controversial feature of the state pension system.
Secretary of State at the DWP, Therese Coffey on 23rd September introduced a 2-clause bill, the Social Security (Up-rating of Benefits Bill) that will address the potential impact of this earnings drop.
There is no legislation for the Triple Lock system. Current law covers basic and new state pension increases (s150A Social Security Administration Act 1992), only addresses uprating in line with earnings growth. The Triple Lock is a Government commitment, over and above this, to uprate by the highest of earnings, prices or 2.5%.
So, subsection (3) below interpreted by the Government means that negative earnings growth precludes any uprating in pension benefits, i.e. without the above Bill, the 2.5% floor is made redundant.
Current legislation says:
(2) Where it appears to the Secretary of State that the general level of earnings is greater at the end of the period under review than it was at the beginning of that period, he shall lay before Parliament the draft of an order which increases each of the amounts referred to in subsection(1) above by a percentage not less than the percentage by which the general level of earnings is greater at the end of the period than it was at the beginning.
(3) Subsection (2) above does not require the Secretary of State to provide for an increase in any case if it appears to him that the amount of the increase would be inconsiderable.
The new Bill will have a new clause, s150A (2A) for next year’s uprating only. This clause effectively overrides the do-nothing provisions of s150A (3) and permits an increase “…by such a percentage as the Secretary of State thinks fit”.
What is a vote matter? Was it a stability matter during crisis? We guess it was combination of many things to keep the triple lock for now but long erm it will have to change. See this week's video on why?