With the Government’s U-turn on scrapping Triple-Lock, just how long can the state pension policy last for?
Before the General Election, the Conservative manifesto included plans to scrap the Triple-Lock Pension scheme and replace it with a “Double-Lock”, removing the 2.5% increase option. After the Conservatives lost their majority however, this policy was put into doubt. The recent Conservative deal with the DUP has confirmed that Triple-Lock pensions will stay until at least 2020, but is there a future for them beyond that?
The Future of Triple-Lock Pensions
Conservative MP David Gauke has said that eventually the policy will have to come to an end. He said:
“If you look at what the triple lock does, it has a ratchet effect, because pensions go up by the higher of inflation or earnings, and in some years it will be one, in some years it will be the other. But over a period of time, it will mean that a greater and greater share of GDP goes to paying the state pension, even without any increases in pensioner numbers, because that’s just the way it works. Do I think that in 10, 20, 30 years’ time we will still have a triple lock? I cannot see in all honesty how we can.”
We may eventually see a reform of the way the Triple-Lock works, but until 2020 at least, the state pension guarantee will remain in place.
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