Pensioners across the UK have been dealt a big win as the Tories are reportedly set to “commit” to the state pension triple lock going into the next General Election.
Prime Minister Rishi Sunak will pledge to keep the annual rate hike to the retirement benefit in any Conservative Party manifesto.
“The triple lock has been in every Conservative Party manifesto since we created it, and we will commit to it again,” a Conservative source told the Daily Express.
Under the triple lock, state pension rates rise every year by either the rate of inflation, average earnings or 2.5 per cent; whichever is higher.
Next month, payments will go up by 8.5 per cent which will make it worth £221.20 a week for the full, new flat-rate state pension and £169.50 weekly for the full, old basic state pension.
During the pandemic, the Government temporarily rolled back on its triple lock promise.
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The Tories are reportedly set to "commit" to the state pension triple lock
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The link to average earnings was temporarily suspended due to wages being artificially inflated and a “double lock” was implemented instead, with payments going up by the rate of inflation.
Concerns have been raised about long-term funding for the benefit due to rising life expectancy and the recent cuts to National Insurance, which partially go towards paying for the state pension.
Recently, Chancellor Jeremy Hunt told peers that the triple lock and state pension age will be “kept under review”.
On the viability of the triple lock, Mr Hunt said it would be “very contingent on how successful we are” at lowering public spending and growing the economy to keep current levels of support.
Despite this, the Chancellor has maintained his support for the triple lock and did not announce any changes to the state pension which would be potentially detrimental to older households.
According to Treasury insiders, Mr Hunt meant a stronger economy was needed to deliver better returns for pensioners.
A source claimed the Treasury was committed to “focusing on productive public services and driving up growth” to help older people.
Despite this, questions remain over what funding for the state pension will look like and whether the triple lock is affordable.
In March 2023, the Department for Work and Pensions (DWP) forecast that total state pension expenditure in 2023/24 will be £124.3billion.
Nick Flynn, director of retirement income at Canada Life, urged policymakers to address the concerns of the triple lock’s future.
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Jeremy Hus previously said the state pension and triple lock should be "under review"
PAHe said: “Looking ahead, with the cost of state pensions increasing through the triple lock formula and in the context of the UK balance sheet, we need a proper debate on the future of the state pension due to the anticipated changes in our population.
“Improvements in life expectancy have slowed, and in many areas of the country gone into reverse.
“The ratio of state pension claimants to workers is expected to change significantly, and if we see this shift in the ratio of workers to retirees this will clearly have significant implications around any debate on the future funding of the state pension.”
State pension payments, as well as other retirement benefits, will rise by 8.5 per cent in April 2024.