Prime Minister Rishi Sunak is under pressure to “review” the future of state pension payments in light of recent news surrounding the triple lock. The Labour Party is reportedly set to commit to keeping the state pension triple lock pledge for the upcoming General Election.
Sir Keir Starmer and Shadow Chancellor Rachel Reeves will reportedly continue the retirement benefit’s safeguards in the Labour’s manifesto despite calls for a “review”.
Sir Keir Starmer and Shadow Chancellor Rachel Reeves is understood to be set to continue the retirement benefit’s safeguards in Labour’s manifesto despite calls for a “review”.
Since 2010, consecutive Governments have promised to raise the state pension every year by the highest out of the rate of inflation, average earnings or 2.5 per cent.
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Labour has pledged to keep the triple lock in place
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This is referred to as the triple lock and has remained in place from its introduction, aside from 2022 when the average earnings link was temporarily scrapped.
Recently, economists have warned that the state pension triple lock has become increasingly unaffordable with a think-tank recently warning the age threshold would need to reach 71 by 2050 to maintain the “status quo”.
However, a senior Labour source told the i that pension growth will be crucial in preventing a “tsunami of pensioner poverty” in the years to come.
This is primarily due to the expectation that rising house prices will affect home ownership going forward which is a main contributor to retirement wealth.
Helen Morrissey, the head of retirement analysis of Hargreaves Lansdown, said it was “only a matter of time” before political parties came under pressure to “show their hand” when it comes to the future of the triple lock.
“Reports suggest Labour will make maintaining the triple lock a part of its manifesto, which will be finalised in the run into the election. These rumours pile on the pressure for the Conservatives to do the same.”
Becky O’Connor, the director of Public Affairs at PensionBee, noted that many Britons rely on the state pension for a “significant chunk” of their retired income.
However, she also said Labour’s pledge to keep the triple lock is being done in part to protect themselves from “political backlash”.
She explained: “Labour's commitment to uphold this promise is expected.
“There is a strong case for a review of the triple lock, but until a time when a viable, more sustainable, alternative for this mechanism is found, the Government has to keep pensioner incomes rising in line with inflation somehow.
“People depend on the state pension for a significant chunk of their retirement income and the triple lock guarantee helps to preserve confidence for today’s pensioners, as well as those hoping to benefit from the state pension in the future.
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GETTY“The PensionBee Pension Confidence Index shows that being entitled to a full state pension is the biggest reason for feeling confident about retirement for four-in-ten people over the age of 55.
“At the same time, a lack of trust in the Government to maintain a decent state pension is a key driver of negative sentiment about retirement for over one in five (22 per cent) of people over age 55.”
From April, those in receipt of the state pension will be awarded a 8.5 per cent rate hike to their payments.
As such, Britons claiming the full, flat-rate new state pension will get £221.20 a week while anyone on the full basic state pension will receive a weekly sum of £169.50 a week.