Pensions  

Truss commits to keep pensions triple lock

Truss commits to keep pensions triple lock
 

Prime minister Liz Truss has confirmed the triple lock will remain in place and state pensions will increase in line with prices next year as September's inflation figure hits 10.1 per cent.

Speaking to the House of Commons today (October 19), Truss said: “We were clear in our manifesto that we will maintain the triple lock.”

The government has shifted its position on the pensions policy in recent months, with chancellor Jeremy Hunt saying yesterday he was “not making any commitments” on the pensions policy.

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This was despite former chancellor Kwasi Kwarteng confirming the policy will remain in place weeks earlier, former chancellor Rishi Sunak committing to the return of the triple lock in May, and Thérèse Coffey saying in March that the triple lock will be honoured for the rest of parliament.

Under triple lock rules the state pension is increased by the highest of earnings growth, price inflation or 2.5 per cent a year.

But the wages element of the lock was temporarily suspended in April this year to avoid a disproportionate rise in the state pension following the pandemic, breaking a key manifesto pledge by the Conservatives.

The government’s normal practice is to use the September inflation figure to determine the increase in pensions the following April, therefore pensioners could be set for a 10.1 per cent increase.

Minister for pensions and growth, Alex Burghart, released an image on Twitter (below) confirming the news.

Chief executive of My Pension Expert, Andrew Megson, said although on the surface the news is welcome for all those with state pensions, planners will likely view this announcement with some scepticism.

“The PM is performing U-turn upon U-turn. It’s impossible to keep up or predict what will happen next. 

“Many will be looking to the chancellor’s next fiscal statement on 31 October to provide more clarity in this regard.”

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown said after such a trying time, pensioners need certainty about how their state pension will be uprated.

“Longer term we may well see calls to reform the triple lock increase, but any such reform will need to happen alongside consideration of how state pension age is due to be increased. 

“A review on this issue has been submitted to government and is due to be published next year. Any changes to the triple lock will need to take its findings into account.”

sally.hickey@ft.com