Proposed changes to the state pension triple lock have been cancelled, following the general election result.
It was expected that the triple lock would be reformed into a 'double lock' under a Conservative premiership.
But, having failed to secure an outright majority, the triple lock and other proposed changes to pension taxation have been thrown into limbo. In the case of the triple lock it has been handed a stay of execution, as part of the Conservatives' deal with the Democratic Unionist Party (DUP) to secure a working majority.
The change in stance was expected as the DUP pledged in its manifesto to retain the triple lock, and did not want to back down and break its word.
Prior to the election, various changes related to pensions were left out of the Finance Bill and temporarily put on ice. Changes on the table, such as the reduction to the amount savers can pay into a pension once they have started taking a pension income (known as the money purchase annual allowance or MPAA), were given a temporary stay of execution, as the policies did not have enough time to be rubber-stamped ahead of parliament being dissolved.
At this stage it is unclear whether those policies will remain or be watered down, but one thing is for sure: it will now be more difficult for the Conservative Party to push reforms through, as they do not have a majority.’
What is the triple lock?
Under the triple lock, first introduced in 2010 by the Conservative/Liberal Democrat coalition government, the state pension increases each year by the highest of three measures: inflation, the average earnings increase, or 2.5 per cent.
As part of their 2015 election manifesto, the Conservative Party pledged to maintain the triple lock until 2020.
This time around the Conservatives retained this commitment, but pledged to tweak the rules after 2020, introducing a new ‘double lock’. Under the double lock, pensions would rise in line with earnings or inflation, whichever is highest.
Other parties have pledged to keep the triple lock, including Labour and the Liberal Democrats.
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