LCP’s Steve Webb comments on the Government’s decision to suspend the triple lock policy for one year only
The Government has announced that it will suspend the ‘triple lock’ policy for one year only, with this year’s state pension rise being the higher of inflation and a 2.5% floor, and then resume the policy next year. This will avoid a large one-off hike in pensions because of the spike in the average earnings figures as a result of the Pandemic. With inflation rising it is likely that the eventual increase will be in the 3-4% range, which also broadly reflects the underlying rate of earnings growth with the effects of the Pandemic being stripped out.
Commenting, LCP partner and former pensions minister Steve Webb (pictured) said:
“With the earnings figures showing a spike because of the Pandemic it is understandable that the Government has taken the decision to suspend the triple lock for one year only. But it is very welcome that they have recommitted themselves to the policy for future years. The UK state pension remains relatively low by international standards and many women in particular depend on the state pension for a large part of their income in retirement. To relax the rules on a one-off basis because of the distortions caused by the Pandemic but to reinstate the policy for future years strikes the right balance”.
