The State Pension triple lock ensures the sum eligible retired Britons receive from the Department for Work and Pensions (DWP) rises each year. The state pension triple lock was introduced by the then-coalition Government in 2010 to ensure the state pension would not lose value in real terms. State pensioners can expect to see their sum rise each year by the highest of the following factors: 2.5 percent, inflation or earnings growth.
There was heated debate leading up to the Budget as to whether Rishi Sunak would keep the Conservative manifesto pledge to maintain the policy or scrap the triple lock altogether.
However, it appears the triple lock has been rescued, as Mr Sunak did not make reference to any change taking place in this Budget.
This is likely to be a source of relief for British pensioners who, for now, are guaranteed to see the state pension sum rise.
A warning, though, has been issued to retirees about the future of the state pension triple lock, and the potential for it to be off the table in the future.
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“Every one percent increase to the state pension adds around £1billion for every future year to the Government’s unfunded pension liabilities, which then creates a ‘pay as you go’ burden on earners below state pension age.”
In the coming 2021-22 tax year, the state pension is guaranteed to rise by 2.5 percent.
The change will come into force from April 6, 2021 onwards as confirmed by the DWP.
However, as the Chancellor left the state pension untouched, unlike his decision on the pension lifetime allowance, there may be potential for a change in the future.
Prior to the Budget taking place earlier in the week, there was some level of resistance about the future of the state pension triple lock.
Ken Clarke, who served as Chancellor of the Exchequer from 1993 to 1997, urged Mr Sunak to reconsider his approach to the triple lock mechanism.
Speaking to Sky News, Mr Clarke said: “I’d scrap the triple lock on pensions, because while there are some elderly people who have been very badly hit by the crisis, the comfortable elderly have really done rather well.
“It’s the poor, it’s the young, it’s the low-paid who have been hit.
“So the triple lock increase in pensions, in the state pension, cannot be justified.”
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