A committee of MPs has said it will continue to press for the state pension triple-lock to be scrapped after the Government failed to agree to its recommendation.
As part of an inquiry into inter-generational fairness, The Work and Pensions Committee published a report in November calling on the Government to ditch the triple-lock – which has uprated the state pension by the highest of inflation, earnings or 2.5 per cent every year since 2012 – with an earnings linked system based on average full time earnings individuals reach in 2020.
Responding to the report today, the Government restated its position that it is “committed to the triple lock for the length of the Parliament” but did not provide any further direction on future policy.
The Government noted that spending on pensioners was forecast to fall from 6.1 per cent of GDP in 2010 to 5.6 per cent in 2020, and that the triple-lock has provided “invaluable” support for pensioners living in low income households.
It also pointed to progress made on auto-enrolment and the new single-rate state pension to improve income for lower earners and women.
Work and Pensions Committee chair Frank Field said his group of MPs would keen pressing for an overhaul of the “unsustainable” triple-lock.
Field said: “We will continue to press for cross-party consensus on the replacement of the triple lock after 2020. The Government is right to say pensioner benefit spending has dipped slightly as a share of GDP, as accelerated increases in the state pension age have kicked in, but official projections show that, without reform, it will rise relentlessly from that point. The triple lock has been valuable but it is unsustainable.
“The Committee has recommended an alternative which would maintain pensioners’ living standards and protect them from the effects of inflation.”
The Office for Budget Responsibility’s triple-lock forecasts
Aegon pensions director said that with the Committee repeating its call for an end to the triple-lock, “it looks like its days are well and truly numbered”.
Cameron says: “The government and policy makers need to consider the long term consequences of any changes as while many of today’s retirees are benefitting from generous defined benefit pensions, future generations of pensioners will not be so fortunate.”