Theresa May’s surprise announcement to hold a snap general election on 8 June has cast doubt over the future of the state pension triple lock.
In a statement outside Downing Street on Tuesday, the prime minister claimed the decision to go to the polls was made to provide Britain with “certainty, stability and strong leadership” in light of the Brexit vote and upcoming negotiations to leave the European Union.
But the decision will also have repercussions closer to home, not least on pensions. A Conservative party manifesto commitment in 2015 stated the triple lock would be maintained until the end of parliament, which was expected to be for five years.
Former pensions minister and director of policy at Royal London Steve Webb said the government had now planted itself in a tricky position: “Labour is committed to the triple lock and with inflation running at close to 2.5 per cent anyway, it is not actually very expensive over a single parliament. To say at precisely this point, to the largest voting block, we’re taking something away that won’t save the government very much money, is high stakes.”
Originally introduced by the coalition government in 2010, the triple lock guaranteed to increase the state pension every year by the higher of inflation, average earnings, or 2.5 per cent. Chancellor Philip Hammond reiterated the commitment in his Spring Budget. But the recent state pension review by John Cridland called for it to be scrapped the end of parliament citing ‘unfairness’, drawing support from recent former pensions minister, Ros Altmann.
According to Mr Webb, constant speculation and uncertainty surrounding the future of the state pension should be replaced with more detail about how it can be sustained.
He said: “What I would like to see is a destination. Where are we heading with the state pension? What are we trying to achieve?”
“It’s not about whether we have a triple lock for five years or not, it’s about all parties being clear about what the role of the state pension is and the level they are targeting.”