State pension triple lock looks safe for now

Experts have called on the government to scrap the triple lock to help pay for the cost of financial support during the pandemic. 

Retired workers will continue to have their state pensions protected by the triple lock guarantee, according to a commitment made by Boris Johnson yesterday.

The triple lock is a legal guarantee that the state pension will rise in line with the highest of average earnings growth, inflation or 2.5%.

It was introduced in 2011 to ensure that the average pensioner household income increased each year regardless of their economic circumstances.

During the session, Mel Stride, a Conservative Party MP, asked the prime minister whether he could give “categorical assurance” that the triple lock along with other manifesto pledges would be protected.

Mr Johnson responded: “We are going to meet all of our manifesto commitments. Unless I specifically tell you otherwise.”

Experts have previously called for the government to scrap the triple lock to help pay for the mounting cost of financial support offered during the pandemic. 

The Treasury also urged the government to cut the state pension triple lock to help cover the coronavirus bill, just two weeks ago.

In a letter to the chancellor, it claimed that £8 billion could be saved per year by getting rid of the guarantee. 

Other Conservative manifesto pledges

The Conservative Party has also pledged to to introduce a “triple tax lock”, as part of its manifesto. 

This means ruling out any increases in the rate of income tax, National Insurance (NI) tax and VAT for five years. 

The government also committed to raising the National Insurance threshold to £9,500 in 2020 with an ambition to increase it to £12,500. 

In the Budget 2020, chancellor Rishi Sunak announced that the NI threshold would increase from £8,632 to £9,500 from 6 April 2020.

This article was originally written by our sister website Moneywise. 

Subscribe to Money Observer Magazine

Be the first to receive expert investment news and analysis of shares, funds, regions and strategies we expect to deliver top returns, plus free access to the digital issues on your desktop or via the Money Observer App.

Subscribe now

Add new comment