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Nic Cicutti: Ros Altmann is campaigning on the wrong issue

Nic Cicutti

How much should someone who is retired receive in state pension each week? Is it time to call a halt to the small but steady progress made over the past decade to reduce the numbers of those still living in pensioner poverty? Should the so-called triple lock be scrapped?

The debate over this issue has been reignited in the past few days after comments by pensions expert Ros Altmann in which she publicly called for the triple lock to be scrapped and replaced by the old-style “double lock”.

Ros, whom I commended last week for a return to her feisty campaigning self after a miserable year in Government office, has burst back on the public stage with her critique of the triple lock system, where pensions rise by the inflation rate, average earnings or 2.5 per cent, whichever is highest.

In an interview with the Observer, she stated the cost of delivering on the triple lock guarantee would be “enormous” after 2020. Ros called the triple lock a “a political construct, a totemic policy that is easy for politicians to trumpet, but from a pure policy perspective keeping it forever doesn’t make sense.”

She told the Observer that during her brief period in office as pensions minister, she had told David Cameron the triple lock guarantee should be scrapped but that he had decided to keep it for political reasons. However, now Theresa May is Prime Minister, Ros felt there was a possibility for movement on the issue.

Well, perhaps there is, but certainly not in the immediate future: Number 10 issued a statement, widely carried by all news media, to the effect that the triple lock will remain in lace – but only up to 2020.

Given that Altmann had only called for it to be removed after 2020 anyway, she may consider that a small victory. By her intervention she has raised the possibility that this is a benefit to pensioners with a certain shelf life.

Were it to be abolished after 2020, she could claim that the decision was at least in part linked to her “brave” decision to speak out last week. The Government meanwhile, could say what it is doing has been validated by no less a person than Baroness Altmann of Tottenham. Truly a win-win for both sides.

My problem is I am not sure this is the right issue to be campaigning on. Oh, to be sure, there will be some who support Ros – last week I spied The Independent’s deputy managing editor Sean O’Grady joining in calls for the triple lock to be abolished.

What worries me, however, is the intellectual process whereby pensioners who managed to clamber belatedly onto the lifeboat after decades in which their income levels fell further and further behind those still in work are now being told to get back into the water again.

The excuse is that pensioners’ income is now at or even above, in some cases, that paid to those in work. According to the Institute for Fiscal Studies in November, the median pensioner income in 2013/14 was £398 a week, whereas for working age people it was £384 per week – after housing costs and dependents were taken into account.

Used in that way, the figures certainly look striking. The problem is the way statistics are used. Median denotes a value at the mid-point of a frequency distribution, so in the case of pensions there are the same numbers of people above as below that level.

But to give an example, if the frequency distribution were to be 1, 3, 3, 6, 7, 8, 9, the median would be 6, despite the disparity between those below the median and those above it.

The other problem is with the focus on overall pensioner incomes. In effect, what has happened is the state pension has become a proxy for all pensioner incomes.

In fact, according to research from Prudential, the state pension accounted for 35 per cent of average retirement income for those planning to retire in 2014.

But one in seven people retired without any other pension other than the basic state pension, and women were nearly three times more likely than men to be entirely reliant on it, because they made no other provisions of their own.

Research from Age UK found that while the proportion of pensioners in relative poverty after housing costs has fallen from 28 per cent in 1994/95 to 14 per cent in 2013/14, 1.6 million pensioners remain living in poverty and a further one million have incomes just above the poverty line.

So what difference does the triple lock have on pension payments? According to the Pensions Policy Institute, in a low-inflation, low-earnings climate the triple lock will deliver pensions on average 0.26 per cent a year more than earnings. This is in line with the assumption made by the Department of Work and Pensions and by the Office for Budget Responsibility in their fiscal sustainability reports.

By 2038 the PPI calculates the difference between an earnings-linked and a triple-locked single tier pension would be a mere £9 a week.

Are there not better ways of saving that money other than by taking it from hard-up pensioners? Ros Altmann says not. I disagree.

Nic Cicutti can be contacted at


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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Personally I am surprised she doesn’t do more for womens’ pensions and help the valiant efforts of WASPI. I understand that someone born in October 1955 now has to wait until age 66 to receive their pension. Assuming they started work at age 16 – that’s a 50 year working life.

    Come on Ros, this is a much more worthwhile fight.

    • But that’s no different to a man born in 1957 (i.e. me!)

    • Andy Robertson-Fox 5th August 2016 at 9:29 am

      Perhaps she should addresss once again the discrimination affecting 4% of UK pensioners, who have met the same terms and conditions in making NI contributions during their working lives as everyone else but who are denied the right to draw their State Retirement Pensions on the same terms and conditions as everyone else.
      Given that the transitional period for Waspi women is dısproportıonate they will at least get what they are entitled to when they become eligible….unlike the frozen pensioner who gets no index linked increase ever.

  2. Given that next week’s state pensions are paid out of this week’s tax and NI receipts, increasing the former at a higher rate than the latter is plainly unsustainable other than by reducing the sums allocated to a whole host of other equally pressing elements of public expenditure. The bottom line remains the same ~ if you don’t put away money today, there’ll be nothing there for you tomorrow. Reliance on the state is becoming an increasingly untenable proposition.

  3. Ros Altman descibed as a ‘pension expert’…….my…a..e

    • Andy Robertson-Fox 5th August 2016 at 1:34 pm

      I suspect she is more expert than Ted Shaw who, from memory, quite recently showed a lack of knowledge but was prepared to comment on the frozen pension issue!

  4. We need a complete shift in the way that old age is funded. We have an ever increasing number of the 65+ which is only set to increase. There will be a point when the working population can no longer afford to support the retired population and I don’t just mean state pension payments.

    We need a whole sale change in the way society funds issues surrounding old age and absolutely everything should be on the table.

  5. For those who reached State Pension Age before April the triple lock only applies to the Basic State Pension element of their pension. From April onwards it will apply to the whole amount up to the maximum flat rate £155pw. Over the long-term this is going to make the triple lock hugely more expensive than originally anticipated, so I’m sure they’ll be reviewing their plans shortly. However, we need more than this, we need a full review of the purpose of the state pension; my view is that it should be means-tested or at the very least tapered for those with other income above a threshold. (Lights blue touch paper….)

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