What the F: Suspension of triple lock pension pledge

Our brand new What the F(inance) series is a space for older people to share their views on money news that matters to them.

The series will be exploring a variety of current affairs, ongoing issues and different opinions that affect you financially, all commented on or written by local people. 

The government has announced a one-year suspension of the “triple-lock” guarantee for annual state pension increases.

It was introduced in 2010 by the Conservative and Liberal Democrat coalition government and was promised in the Conservative’s 2019 election manifesto for the duration of their time due in parliament.

At present, state pensions are supposed to increase every year in line with either inflation, average pay rise or 2.5 per cent.

Work and Pensions Secretary, Therese Coffey, told MPs that the ‘average earnings component’ will be disregarded in the upcoming 2022 to 2023 financial year.

Why is it being suspended?

During the pandemic, lots of people were earning less than usual because they were being placed on the furlough scheme.

As people are now coming off furlough and are being put back on full pay, there has been a sharp rise in average earnings, estimated at eight per cent from May to July 2021.

Under the rules of the triple lock guarantee, it would mean that state pensions were also due to also rise by a similar amount (eight per cent). Simply put – the policy is ‘too expensive’ to run.

Pensions will now just rise by either inflation rates or 2.5 per cent.

Will the triple lock promise disappear for good? 

There are concerns that the triple lock scheme will be scrapped and this is a big worry for people who rely on their state pension as their only source of income.

The scheme was put in place to ensure that people were receiving the correct amount of pension in line with the rising cost of living.

The government did announce plans to restore the triple lock after this suspension for the remainder of their time in parliament, which ends in 2024.

What do people think?

Jean Friend from Oldham said: “Track and Trace has cost in the region of £37 billion.

“When we left Europe we were promised £350 million a week, they paid sweeteners to CEO’s who have supported them yet the government expects pensioners to live off around £179 a week.

“I have friends who have no other income than their state pension.

“I am coming up to my 70th birthday, I left school at 16 and have paid into the system every month that I was working.

“If the working class managed their money like this government has, they would be more demonized than they already are. The government has broken so many election promises.

“Those who voted for them have been let down.”

What do you think? Leave us a comment or send your thoughts to [email protected]

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