Cabinet minister Therese Coffey drops biggest hint yet pensions triple lock WILL be ditched
A CABINET minister today dropped the biggest hint yet that the pensions triple lock will be ditched.
Work and Pensions Secretary Therese Coffey admitted the government is “looking at” ripping up the manifesto commitment amid warnings the bill will balloon by £3 billion this year alone.
Her comments come as senior ministers privately tapping up Tory MPs to work out how much opposition there would be with tearing up the pensions policy.
Quizzed on the plan, Ms Coffey said: “We’ll be looking at what is happening with earnings and that’ll guide us on what happens on the pensions rise given to pensioners next year.
“I know we need to be driven by the data.”
Senior ministers have been quietly sounding out Tory backbenchers over ditching the manifesto commitment for the past week or so.
Currently pensions go up in line with average wages, inflation or 2.5 per cent – whichever is highest.
Using this triple lock means pensions are set to rocket by a whopping 8 per cent – or £3bn – next year.
This is because millions of workers were laid off or saw their pay slashed last year, but salaries are now recovering – artificially sending the bill soaring.
One Tory approached over the looming change told The Sun: “I told them my voters would be furious – but we can’t afford it. So we should go ahead and do it.”
Both Boris Johnson and Chancellor Rishi Sunak have hinted that the triple lock will be ditched.
Speaking earlier this month, the PM said: “We have got to have fairness for pensioners and for taxpayers.”
While Mr Sunak has said he recognises “people’s concerns” over the soaring bill and said Britain must have a “fair” system.
One option up for consideration by ministers is tweaking the triple lock this year so wages are measured over a two-year average, rather than a single year.
Top tips to boost your pension pot
DON’T know where to start? Here are some tips from financial provider Aviva on how to get going.
- Understand where you start:Before you consider your plans for tomorrow, you’ll need to understand where you stand today. Look into your current pension savings and research when you’ll be eligible for the state pension, and how much support you’ll receive.
- Take advantage of your workplace pension: All employers are legally required to provide a workplace pension. If you save, your employer will usually have to contribute too.
- Take advantage of online planning tools: Financial providers Aviva and Royal London have tools that give you an idea of what your retirement income will be based on how much you’re saving.
- Find out if your workplace offers advice: Many employers offer sessions with financial advisers to help you plan for your future retirement.
Most read in Money
This will deflate the price without actually tearing up the link to earnings.
Ministers would not have to change the law to make this adjustment.
Downing Street is expected to make a final decision on the triple lock later in the year after they get the final data on what average earnings are in August.
