Triple lock: State pension could go up less than expected next year

Triple lock: State pension could go up less than expected next year

The blog section can be rewritten in simpler English as follows: Picture credit: Getty Images.

Authored by Paul Seddon and Chris Mason, BBC's representative in matters of politics.

Triple lock: State pension could go up less than expected next year - Figure 1

The secretary in charge of work and pensions has declined to promise an increase in the state pension so that it aligns with the official earnings statistics.

The government has made a promise that next year's pensions will increase by either 2.5%, the cost of living, or the average salary, whichever is the greatest.

Information that was made public earlier indicated that the expected average wage for the summer season would be around 8.5%.

Mel Stride stated that he was unable to promise the utilization of it for the computation.

He spoke to The World At One on BBC Radio 4, and stated that the government is still "devoted" to fulfilling their triple lock commitment.

However, he stated that he would refrain from delving into the technicalities of the formal procedure for determining the increment, which commences in the upcoming autumn season.

It is predicted that the highest benchmark for earnings this year will be 8.5%. If this is the case, the new flat-rate state pension would rise to £221.20 per week. Alternatively, the full, old basic state pension would be £169.50 per week.

Officials are considering using a different number for earnings that doesn't take into account bonuses given to public sector workers. This number, which excludes bonuses, is 7.8%.

Typically, the amount earned from May to July, which also includes bonuses, is utilized to determine the increase in pensions for the succeeding April as part of the triple lock system.

The mean for this year has been increased due to special bonuses given to resolve conflicts in pay for government employees.

During his Radio 4 chat, Mr. Stride pointed out that bonuses had a noticeable impact on the number, but the ultimate decision would be reached after a legal examination later this year.

He further acknowledged that the triple lock, which was included in the election pledges of both major political parties, cannot be maintained in the "extremely prolonged" future.

"However, the current situation that I am addressing is our present circumstances. Our stance remains firm in upholding the triple lock," he further explained.

Angela Rayner, the deputy leader of the Labour party, recently declined to guarantee the inclusion of the triple lock in their manifesto for the upcoming general election predicted to take place next year.

During an interview with BBC Breakfast, she stated that it is crucial to review the finances as we approach the general election to determine our positioning.

The Prime Minister Rishi Sunak has declined to comment on the possibility of including it in the Conservative election manifesto. However, Mr. Stride has previously stated that it is highly likely to be included in the manifesto.

Ever since the Conservative-Lib Dem coalition government pledged to uphold the triple lock back in 2010, both parties have vowed to continue its maintenance during every election.

The government's commitment has become pricier to uphold due to the increasing inflation of the previous year. Moreover, the UK's aging populace has led to doubts about its potential to last in the long run.

The government has refused to pledge to match the total earnings amount and is instead considering a lesser figure that excludes certain non-recurring payments. This decision could result in saving hundreds of millions of pounds.

However, there is a possibility that critics may argue that the ministers have violated the essence of the triple lock system.

Currently, both the Conservative and Labour parties are not promising to continue the triple lock system post-election. In the event that the Conservatives decide to maintain it, it is likely that the Labour party will also choose to do so. However, if the Conservatives make adjustments to the triple lock, it is possible that Labour may also decide to make similar changes.

According to the Institute for Fiscal Studies (IFS), a group of thinkers, hanging onto the triple lock may mean we have to spend an additional £5bn to £45bn per annum, taking inflation into account, by 2050.

William Hague, a former Tory leader, wrote an article in the Times where he advised both main political parties to allow themselves the chance to reconsider their position on the triple lock. He labeled the system as being "unsustainable" for an extended period.

He mentioned that it would not be wise for either party to promise to abolish it alone as it could lead to failure in the election. However, there are occasions in politics where collaboration is necessary.

He further commented that when people are on a train that is out of control, they all share a desire for someone to come and repair the brakes.

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