Minister says the pensions triple lock is 'unsustainable'

Campaigners accuse the government of ‘sleight of hand’ as minister says the pensions triple lock is ‘unsustainable’ and could be watered down

• Work and Pensions Secretary Mel Stride committed to triple lock for now
• Labour’s Angela Rayner refused to say if her party would commit to triple lock 

The pensions triple lock is unsustainable and could be watered down, a minister admitted yesterday.

In a bombshell move, Mel Stride suggested retirees might not get the expected 8.5 per cent rise next year – despite a commitment to keep the state pension at least in line with earnings.

The warning from the Work and Pensions Secretary heightens fears about the triple lock, which has dragged up retirement incomes after years of neglect.

Mr Stride said the Government was committed to keeping the mechanism ‘at the moment’ but insisted it was ‘not sustainable’ in the long term.

Labour’s deputy leader Angela Rayner repeatedly refused to say whether her party would commit to the triple lock in its election manifesto.

Work and Pensions Secretary Mel Stride suggested retirees might not get the expected 8.5 per cent rise next year

A full new state pension – typically offered to those who reached state pension age after April 2016 – could rise from £203.85 per week to £221.20 next year

And Rishi Sunak dodged questions about whether the Conservatives would do so. Former Tory leader William Hague, who is close to Mr Sunak, said it was time to ‘unpick’ the triple lock and move to a cheaper system.

READ MORE: Rishi Sunak told ‘triple lock’ has kept pensioners ‘afloat’ during cost-of-living crisis

The triple lock guarantees that the state pension will rise in line with either inflation, earnings or 2.5 per cent, whichever is highest.

It was introduced by the coalition government in 2010 following derisory increases of as little as 75p a week under Labour.

Official figures yesterday revealed that average earnings rose by 8.5 per cent, which is higher than the expected inflation figure.

But Mr Stride suggested ministers may strip out the value of bonuses when calculating next year’s triple lock figures – cutting the potential state pension rise to 7.8 per cent and saving the Treasury hundreds of millions of pounds.

The move would hit 12.5million older people. It would mean that someone on the new state pension would get an extra £15.90 a week next year instead of £17.33, costing them £74 a year.

The basic state pension, paid to millions who qualified before 2016, would rise by £12.18 a week instead of the expected £13.28.

Mr Stride stressed the need for any increases to take into account ‘affordability and the position of the economy’.

Labour’s deputy leader Angela Rayner has refused to say whether her party would commit to the triple lock in its election manifesto 

But campaigners accused the Government of ‘sleight of hand’. Dennis Reed, of the campaign group Silver Voices, said: ‘Pensioners would take a very dim view indeed if the Government starts watering down the triple lock in this way. The Government says it is committed to the triple lock – people don’t expect this sort of sleight of hand to reduce it.

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‘The triple lock is a symbol of the way a society treats its older people. Any move to pare it back will be seen as slippery slope towards getting rid of it altogether.’

Former Tory pensions minister Ros Altmann said: ‘I would most strongly advise the Government against any tinkering with the earnings inflation indices this year, in an attempt to shave a bit off state pensions in the teeth of a cost of living crisis.

‘Don’t forget, just as inflation was taking off to more than 10 per cent, the Government decided pensioners would only get a 3.1 per cent rise.’

One minister warned ditching the triple lock in the run-up to an election year would be ‘electoral suicide’, adding: ‘I have no idea why anyone is even suggesting this now.’

Mr Stride told BBC Radio 4’s World at One that ministers could strip out the value of bonuses but said he did not want to ‘get into the weeds’ of a decision that will be taken later this autumn.

He added: ‘We have known for a long time that in the very, very long term you are absolutely right, it is not sustainable.

‘But of course what I am dealing with is now and where we stand at the moment is we remain committed to the triple lock and that is the path that we will be taking. As to the future and after future general elections and so on and so forth, who knows. But that is the position we are in at present.’

The latest figures from the Office for National Statistics show an 8.5 per cent monthly increase in total pay. This was partly skewed by one-off payments to public sector workers over the summer. Regular pay – stripping out bonuses – rose by 7.8 per cent. That matched a record set in the three months to June.

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