Pensions  

Govt pledges to honour triple lock for rest of parliament

Govt pledges to honour triple lock for rest of parliament
Thérèse Coffey, Secretary of State for Work and Pensions, arrives at Downing Street

The pensions triple lock will be honoured for the remainder of this parliament, Thérèse Coffey has said.

The Secretary of State for Work and Pensions made the commitment in a business debate yesterday (March 21) on the impact of the cost of living crisis on pensioners, brought by Labour.

The shadow Secretary for State Jon Ashworth asked Coffey whether she would commit to honoring the triple lock amid concern that older people and pensioners risk being at the “sharp end” of the cost of living crisis.

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“On the same day that the government broke the triple lock, they introduced the national insurance increase, a proportion of which, for the first time, will be paid by working pensioners,” he said.

“That is not protecting pensioners’ spending power or protecting them from the higher cost of living."

He said that is why older people are now asking whether the government will break their promise on the triple lock next year too.

Ashworth asked: “Can [Coffey] confirm that the triple lock will be honoured for the rest of this Parliament?"

Coffey replied: “The answer is yes, I do make that commitment."

The news comes 24 hours before the chancellor Rishi Sunak is due to announce his spring statement.

Inflation sending chill through pensioners

Steven Cameron, pensions director at Aegon, said this will offer some reassurance to state pensions, but that continued levels of high inflation is sending a “chill” through pensioners.

He said: “Looking ahead, there’s a good chance that state pensioners will be in for a bumper increase in April 2023…which will include inflation till September 2022.

“However, a year’s a long time to wait to ‘catch up’ and unfortunately, some of our elderly might not live to see the increase."

Cameron said one approach would be to offer a higher state pension increase this April, for instance to 5.6 per cent, in exchange for a lower increase next April.

“The chancellor has a hugely difficult task of offering support in the current cost of living crisis and pensioners are one group who need particular attention.”  

Government defeat

The government suffered a defeat in the House of Lords last November over its plans to restrict increases in the state pension by temporarily suspending the triple lock.

The Lords voted by 220 to 178 to back an amendment to the Social Security (Up-rating of Benefits) Bill that would have seen the earnings link in the triple lock kept in place this year 

The government had temporarily suspended the wages element of the pensions triple lock for 2022/23 to avoid a disproportionate rise of the state pension following the pandemic.

Under triple lock rules the state pension is increased by the highest of earnings growth, price inflation or 2.5 per cent a year, and there were concerns this meant it would rise by more than 8 per cent this year due to a distortion caused by the pandemic.