State pension: Rishi Sunak and Boris Johnson ‘right to suspend triple lock’ | Personal Finance | Finance –

Published On: Mon, Sep 13th, 2021

State pension: Rishi Sunak and Boris Johnson ‘right to suspend triple lock’ | Personal Finance | Finance


Many savers were left disappointed after the Government announced it would not allow the state pension to rise by almost nine percent this year. Average earnings saw a big spike due to the UK’s economic recovery from the pandemic, meaning the pension was set for its biggest increase in years. But this sparked concern over intergenerational fairness, as working people, who were more affected by the economic crisis, were set to foot the bill. Nevertheless, some pensioners have voiced fury directed at the Prime Minister.

Terry Wrigley from Amesbury, for example, told The Guardian last week that it’s a “bloody rip-off” that he will have to pay National Insurance contributions on top of losing out because of the triple lock suspension.

He added: “I’m working class and left school in 1967 and have paid National Insurance for over 50 years.

“I think it’s a cheek of this Government to take further contributions from me, especially when it means I won’t be getting more pension.”

However, economist with the free market Institute of Economic Affairs, Julian Jessop, tells Express.co.uk that Mr Johnson made the right call.

He said: “I think it was right for them to change the triple lock for this year at least, I wouldn’t have done it necessarily in the way that they have done, I would have retained some form of link to average earnings.

“I would have used some underlying measure to be more consistent with the manifesto.

“As it happens though, the pension will probably come to a similar place as inflation is likely to be between three and four percent.”

Some experts suggested that the Government could use an average earnings figure with the impact of the pandemic stripped out to create a fairer percentage of increase.

Instead, Mr Johnson and Chancellor of the Exchequer Rishi Sunak went for something akin to a double lock – completely ignoring average earnings and increasing the pension by either 2.5 percent or in line with inflation.

Mr Jessop also tells Express.co.uk that the triple lock is “unsustainable” in the long term.

He said: “The longer term future of the triple lock does need a review as well because we do know there is going to be huge pressure on public finances because of an ageing population.

“The triple lock is not sustainable in its current form, because of the way it is designed. Pensioners get all the upsides when the economy is strong, but don’t get the downsides.

READ MORE: Johnson and Sunak told to abolish state pension lifetime allowance

“UK pensioners have been ripped off for four decades since Margaret Thatcher cut the earnings link.

“The triple lock had cross-party support because it began to right this longstanding wrong.

“To scrap it now would be a betrayal of pensioners and risks more pensioners falling into fuel poverty this winter.”

Research commissioned from the House of Commons Library shows that if Margaret Thatcher had not ended the link between average wages and the state pension in 1980, single pensioners would get £188.80 per week compared to the actual level of £137.60.

Between 1980 and 2011 the pension was increased by the rate of inflation each year, before the earnings link was restored by the Coalition Government under the triple lock policy which sees payouts rise by whichever is the larger of inflation, wage growth and 2.5 percent.



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