Jeremy Hunt said that keeping the pension triple lock would be in the Conservative party’s manifesto
Good morning. One sure sign that an election is on the way is that pensions increasingly become a topic of political conversation. At the weekend Jeremy Hunt, the chancellor, said that keeping the pension triple lock would be in the Conservative party’s manifesto. At the liaison committee yesterday the Tory MP Stephen Crabb asked Rishi Sunak to confirm that he wanted to keep it in place for the whole of the next parliament. Struggling to suppress his belief that this was a daft question, because the answer was obvious, Sunak replied that it was safe for Crabb to assume that the answer was yes.
The triple lock is a pledge to increase the value of the annual state pension every year in line with earnings, inflation, or by 2.5% – whichever is higher. Introduced by the coaliton government, it is designed to ensure that pensioners never start falling behind other groups in terms of living standards. Over the last decade it has helped pensioners considerably, and you can see why Sunak wants it in the manifesto. But it does not come cheap.
The argument was, if we speed up the increase in the pension age, there will be fewer pensioners, and we’ll be able to pay them a higher pension.
That was the trade-off on which the triple lock rested when it was first introduced, and it is a reminder that somehow or other these pledges have to be paid for, even with unpalatable measures like that which have come back and proved to be very controversial.
The triple lock proved to be more expensive in practice than was anticipated when the policy was first announced, just because of the way in which the economy operated after 2010. It did more to increase the value of the state pension than anyone had thought was likely.
Ultimately, governments are going to have to take into account the wider fiscal situation. If you prioritise the increase in the state pension, then one way you can address that is by looking at the age in which it comes into play.
