Labour commits to keep triple lock until 2025

Labour commits to keep triple lock until 2025

The triple lock on annual state pension increases would remain in place until 2025 if Labour were to win the next general election, the shadow work and pensions secretary has promised.

Debbie Abrahams said extending the triple lock for five years would promote a "a more equal society".

The current Conservative government has only promised to keep the policy - which sees annual increases in line with the highest of inflation, earnings or 2.5 per cent - in place until 2020.

Beyond that the government has made no commitment.

Ms Abrahams' comments came on the same day that the Office of National Statistics released figures showing the average disposable income for a retired household had increased 13 per cent since the 2008 financial crisis.

Income for non-retired households, meanwhile, fell by 1.2 per cent over that period - though it was still higher than that of retired household in actual terms.

The ONS put this discrepancy down to higher private pension savings and the triple lock, leading some to predict the triple lock would be scrapped. 

But Ms Abrahams said the figures demonstrated how important it was to maintain pensioners’ income in order to "work towards a more equal society". 

She continued: “However, much more needs to be done. That’s why Labour has committed to maintaining the triple lock on the value of pensions until 2025.

"Only yesterday, I asked the Government whether they would match Labour’s commitment on the triple lock but they refused to do so."

But Jon Greer, a pensions expert at Old Mutual Wealth, interpreted the ONS data in the opposite, claiming it was evidence of an intergenerational imbalance weighted towards retirees.

“At first glance, the data paints a positive picture that disposable income across the population is on the rise," he said.

"However, in reality the majority of working households are seeing a decline in their disposable income, with the overall rise being skewed by the surge in income for retired households as the ‘baby boomer’ generation retires."

Mr Greer said the report would encourage though on how to rebalance "the intergenerational contract".

"The most obvious targets are the state pension triple lock, which seems likely to be replaced with an earnings linked system, and  universal pension benefits, like the winter fuel allowance, which could come under scrutiny,” he said.