Industry reacts to Sunaks pension triple lock commitment

Tuesday, March 29, 2022
author picture Arthur Petit
Video/image source : youtube, idailymai
Original content created by staff

With the pension triple lock now back in place‚ many are asking whether Mr Sunak will honour his pledge. The Chancellor has made it clear that he will not break the pledge‚ and if he does‚ he will need Boris Johnson's backing to do so. But the pensioner population seems to be more supportive than ever‚ so a temporary suspension of the policy is probably the best option. The triple lock commitment is a politically sensitive issue‚ so it is important to understand how this will affect the industry. While he is concerned about the backlash he may receive from older voters‚ the prime minister wants to retain this policy‚ despite the acrimony between it and the Conservative Party's manifesto pledge. In the meantime‚ the government is waiting for the draft regulations to see how the proposal will affect the pension. The pension triple lock commitment will be suspended for another year. It is likely that the Chancellor will fiddle with wage growth figures‚ which will cost the Government PS3 billion. The government is also worried about justifying the generous state pension‚ as it would result in nearly PS12‚000 less per person by age 85. Clearly‚ this move will not be a popular decision‚ but it is one that is likely to irritate many older voters. The state pension triple lock will work as usual for the next three years‚ and Rishi Sunak has confirmed this. The increase in the state pension is calculated by a modified formula‚ which omits pandemic‚ furlough‚ and earnings growth. As long as price inflation stays at the same pace as wages‚ the scheme is a good choice for the pensioners. However‚ the government will need to show that the increased payments will be delivered to the right beneficiaries. The government has confirmed that it will suspend the triple lock for at least a year and fiddle with wage growth figures. It is likely that the increase will be too small to pay back the debts the state pension has incurred over the last 18 months. The Chancellor's decision to abandon the triple lock would irk the pensioners and their backbench Tory MPs. In the meantime‚ the Government will keep the 3% CPI inflation rate and a 2.5 per cent hike in the state pension. The Triple lock is a big deal for pensioners. It will raise the state pension above PS10‚000 for the first time. As a result‚ it will be more affordable than ever before‚ which is an important consideration for many families. The latest figures from the Office for National Statistics show that the average salary in the UK grew by 8.8% in the three months to June. So this is a good move for those on a low income. Despite the government's pension triple lock commitment‚ the triple lock will still not lift the state pension above PS10‚000 for the first time.

industry reacts to sunaks pension triple lock commitment
Image source : idailymai

The Chancellor's announcement is a major milestone for pensioners‚ but the 'triple lock' will not be enough. With the government's new measures‚ the money will still be needed to pay for the current and future generations. But there are still a number of challenges. The 'triple lock' will have to balance the demands of targeted and temporary support. The Government's plans to increase the state pension by 8% would cost PS3 billion. That's why the triple lock is not possible. A single-digit increase will cost the government around PS3 billion. Instead‚ it will cost the government around PS4 billion to deliver. This is an unacceptable outcome‚ and the double lock will not help the economy. But if the budget is cut‚ it will have a negative impact on the government's finances. A triple lock for pensions is a more equitable way to increase pensions. The triple lock will only increase the state pension by 8 percent. The increase would have a negative impact on the economy‚ but most of the retired population will be able to stay in work. This would be the most effective way to ensure that those on low incomes can continue to earn enough. A double lock will increase their state pension by at least four percent.