Now No.10 drops its pensions promise: Downing Street ditches commitment to triple lock in strong sign that manifesto pledge could be broken
Downing Street yesterday dropped its commitment to the pensions triple lock, in the strongest sign yet that the Tory manifesto pledge is about to be broken.
No 10 recently insisted it remained official policy amid fears that soaring earnings growth would trigger a record hike in the payment.
But the Prime Minister’s official spokesman refused to say if he would still guarantee an annual rise by the highest of either wage growth, inflation or 2.5 per cent.
Downing Street yesterday dropped its commitment to the pensions triple lock, in the strongest sign yet that the Tory manifesto pledge is about to be broken (stock image)
With first-quarter earnings up 8.8 per cent on a year ago – when they fell as workers were furloughed or had their hours cut due to the pandemic – pensioners could get £822 more in 2022.
The spokesman said: ‘No decisions have been made. The triple lock remains, but we recognise the legitimate concerns about the potentially artificially inflated earnings impacting the future uprating of pensions.’
Experts believe ministers will seek to fudge the issue by basing the rise on inflation or a two-year figure for wage growth ignoring the distortions caused by Covid.
Jon Greer, of wealth management company Quilter, said it would be ‘right to correct the earnings growth anomaly’.
No 10 recently insisted it remained official policy amid fears that soaring earnings growth would trigger a record hike in the payment
Former pensions minister Sir Steve Webb, partner at the consultancy LCP, said the question was whether the move was temporary, adding: ‘Most people would understand a one-year change. To get rid of it permanently would be a breach of faith in the manifesto.’
The figures due to determine next year’s pensions rise will be published next month, showing the latest levels of inflation and earnings growth.
If the triple lock were maintained and based on wage growth for the three months to July, it would lead to a record boost that could push the state pension over £10,000 a year.
This is because earnings growth is compared with the level between May and June of the previous year, and in 2020 it fell because the pandemic saw millions of workers placed on furlough or having their hours cut.