Aegon UK: State pension triple lock’s future is ‘turning into a game of pensions poker’

by | Sep 13, 2023

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Steven Cameron, Pensions Director at Aegon has commented on the future of the state pension triple lock.

He said: “In the week where earnings figures are pointing to an inflation busting 8.5% increase in state pensions next April after a 10.1% increase this year, the state pension triple lock’s future is turning into a game of pensions poker. 

“Both the Conservatives and Labour are keeping their cards close to their chest with political risks for whoever shows their hand first. The big question is whether to ‘stick or twist’. Sticking with the current formula would create huge and unpredictable costs met from the National Insurance contributions of today’s workers at a time when both parties need to make sure they can visibly balance the books. But being first to ‘twist’ by announcing an end to the triple lock risks losing the support of swathes of older voters.

“While it’s extremely hard to take politics out of state pensions, ideally the way forward would balance the need to protect older generations, many of whom rely heavily on the state pension, with making it affordable to those of working age who are also facing financial challenges. One way of shuffling the deck might be to retain some commitment to considering both price and earnings inflation but to look over a three-year period rather than the highest year on year.”

 
 

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