State pension triple lock ‘was never intended to last forever' – Rishi Sunak urged to set out new plan
Rishi Sunak is being urged to set out a new plan regarding the annual increases to the state pension
PA
Pensioners on the full state pension look set to get a “bumper” rise of more than £900 a year from April 2024 under the triple lock.
Unless September’s inflation figure tops 8.5 per cent or wages growth is adjusted, the state pension is expected to rise by 8.5 per cent.
It would mean the full new state pension rises to £11,541 a year and the full basic state pension would increase to £8,814 a year.
Following a 10.1 per cent rise in April 2023, the affordability of the state pension triple lock is a growing concern.
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Retirement experts at Royal London are arguing the state pension triple lock was never intended to be a permanent solution, but as a means to increase the real terms level of basic retirement income.
They are calling for the government to set out a plan for what level of state pension is adequate and affordable, with details of what would replace the triple lock when its achieved its objective.
They also argue that an annual debate about the application and affordability of the triple lock is not helpful for people trying to plan for their retirement.
Jamie Jenkins, director of policy and communications at Royal London, said: “The importance of the state pension shouldn’t be underestimated.
“It’s the foundation of most people’s income in retirement and for three in ten women and one in eight men, it’s their sole income. It would take a pension pot of around £220,000 to buy the equivalent level of income using an annuity.”
Mr Jenkins said the triple lock, which was introduced in 2010, was intended to address the state pension slowly devaluing relative to rising earnings throughout the noughties.
He continued: “It was never intended to last forever and all the projections demonstrate how this would likely become unaffordable over time.”
The triple lock is a commitment that the state pension would rise in line with the highest of inflation, earnings growth or 2.5 per cent.
The figure typically used for the earnings element this year came in at 8.5 per cent, and the inflation figure will be published later this month.
The government will confirm the amount the state pension will rise by in autumn.
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The government will confirm the amount the state pension will rise by in the autumn
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Mr Jenkins added: “The Government has yet to confirm whether the triple lock will apply this year, and neither of the two main parties has committed to its longer-term application.
“The time is right for a proper debate about what level of state pension is fair and affordable, and what will replace the triple lock once that level is achieved.”
A DWP spokesperson said: “The Government is committed to the triple lock.
"As is the usual process, the Secretary of State will conduct his statutory annual review of benefits and state pensions in the autumn, using the most recent data available.”