The demise of the triple lock.

jimpwarsop

Rishi Sunak will have to end the triple lock IMHO, average wages are going to take a dive this year, of course this doesnt affect state pensions, but then next year (I hope) average earning will bounce back.

To be fair I never agreed with the triple lock, but I suppose it attracted a few million votes.

sparky0138

Just out of interest, why didn't you agree with the triple lock? What do you think we should have instead?

michaels

With the CV mucking up the economy and pushing down inflation and wages I can certainly see an argument that the 2% part of the lock should be suspended. I am sure when it was introduced there was no expectation that it would actually ever come into play.

Thrugelmir

Hard to argue with the lock remaining now that inflation is at such low levels.

hugheskevi

Interesting to note that if the pre 2010 rules of RPI increases with a policy of (but not legislative requirement) minimum increase of 2.5% had continued unchanged, the Basic State Pension would actually be higher today than under the Triple Lock.

There is a good analysis at this link.

jimpwarsop

sparky0138 said:

Just out of interest, why didn't you agree with the triple lock? What do you think we should have instead?

I think if benefit claimants are protected from inflation, i.e. their spending power is maintained, then that is sufficient safeguard.

As I understand the triple lock, if wages are stagnant and inflation is zero the state pension still rises.

I would just have the inflation link.

Silvertabby

If I understand this correctly, part of the concern is that when the 80% furlough ends this/next years average earnings increase will be artificially increased by the uplifts back to 100%.  The original triple lock didn't take Covid emergency measures into account, so it's reasonable to have to tweek it now. 

Of course, there a lot of State pensioners out there who would welcome a huge increase to the State pension, but it would be unaffordable and unneccessary provided that inflation remains low.

OldBeanz

jimpwarsop said:

...

I would just have the inflation link.

Gordon Brown was crucified when the pension increased in line with inflation by 75p. There are also a number of rates of inflation and the pensioner inflation rate would be different to a young family.

MEM62

jimpwarsop said:

Rishi Sunak will have to end the triple lock IMHO, 

That would be an incredibly brave decision.  The older generation vote in larger numbers!

jimpwarsop said:

To be fair I never agreed with the triple lock.

You view on that may change when you have reached retirement  :-) 
  

squirrelpie

Thrugelmir said:

Hard to argue with the lock remaining now that inflation is at such low levels.

Well the 2.5% part doesn't do anything at all unless inflation is low, so it's certainly hard to argue for that part of the lock if inflation is greater than 2.5%. So I think you have your logic reversed.

The inflation lock and the wage growth lock make sense whatever the inflation rate is. It makes some sense to make pensioners pay towards the cost of dealing with coronavirus, since older people are the main benificiaries of that (or losers from the coronavirus). But if he tries to charge pensioners, then he's going to have to explain why the coronavirus policies have been such a shambles and a lot more of the people being charged have died than could/should have been the case. Not to mention why he's breaking manifesto pledges that were reaffirmed as recently as May 27.

Andy_L

OldBeanz said:

jimpwarsop said:

...

I would just have the inflation link.

Gordon Brown was crucified when the pension increased in line with inflation by 75p. There are also a number of rates of inflation and the pensioner inflation rate would be different to a young family.

and breaking the link to earnings & using only inflation (early 80s?) for 20 odd years was responsible for the huge decline of the state pension relative to earnings leading to the, then, problems of pensioner poverty