As the pressure on the triple lock rises, Rishi Sunak warns that “confidence is quickly eroded.”
As Rishi Sunak’s Autumn budget approaches, he is being dogged by questions over the viability of the state pension triple lock. This is the point at which the future of the triple lock must be decided.
Will it be raised by 8%, altered, or discarded entirely?
Wage growth has surpassed 8% in recent months, as workers continue to be eased off furlough benefits as the deadline for the end of September approaches. In normal circumstances, this would be a remarkable accomplishment.
However, these are not ordinary times.
Since 2011, when the government implemented the triple lock, state pension growth has been guaranteed in line with the highest of inflation, salary growth, or 2.5 percent.
As a result, the value of the state pension has increased in terms of spending power over the last decade, shielding it from the global pandemic’s fluctuations.
Experts have labeled the salary rise seen as “artificial,” as it indicates wages just returning to pre-furlough levels rather than true wage growth.
However, events like these were not taken into account when the triple lock was calculated, and if it is not suspended or cancelled, the Chancellor will be forced to pay an additional £8 billion.
This is an unenviable issue for anyone wanting to decrease the UK’s eye-watering £300 billion deficit.
“We certainly have a problem with perceived fairness,” Margaret Snowdon OBE, chair of the Pension Scams Industry Group, told This website exclusively. The triple lock was and continues to be a mechanism to ensure that pensions stay up with inflation.
“When compared to other economic policies, it is excessively liberal, and I am sure the government regrets proposing it.”
Rishi Sunak must contend with a storm of political conflicts and perceived injustices, and while the current state pension settlement appears to be comfortable for retirees, recent study has revealed that the UK’s state pension is the meanest in the industrialized world.
Not only does the new full state pension cover only about 22% of pre-retirement income, but hundreds of thousands of pensioners earn less than £100 per week from their state pension.
Many of these individuals have missed years of National Insurance contributions as a result of their inability to work due to the demands of having a family.
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