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Triple lock increase for April 2027 is 3.9% (probably)
Comments
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However you are assuming that ‘prices’ means CPI. If Andy meant that, why didn’t he say so?
I genuinely don't know if he did mean CPI but didn't say CPI due to the wider audience who will watch the speech on the news.
Did his speech writer deliberately dumb down 'CPI' to 'prices' thinking everyone knows what prices means but not everybody knows what CPI is.
I know on here we all know what CPI is but you would be surprised how many people do not know what CPI is.
I wonder if we are reading too much into the use of the word 'prices'. Only time will tell…
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You could put it another way.
The Triple lock maybe mathematically flawed, but it has worked to improve the value of the SP, which had previously declined significantly compared to average earnings. But now it has done its job, it is maybe time to change it.
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Perhaps because he was giving a political speech to a party conference rather than an economics lecture at the LSE.
Politicians of all stripes, in general, do not go into deep financial detail at such events (not even The Chancellor).
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I agree - as an above average soon to be state pensioner I think I will probably benefit more from the lower taxation needed that I will lose from the loss of wage growth indexation over my lifetime.
The losers are lower earning pensioners and future retirees for who will miss out on the state pension keeping up with earnings. Luckily financial education in this country is so bad that it is the losers who are probably most keen to see this 'intergenerational fairness'. Not sure whether to laugh of cry……
I think....0 -
But the same people you identify as losers are also likely to be among a cohort who will have access to a National Care Service. If Burnham were only changing the formula for pension increases your point would carry some weight.
Burnham also set down that his commitment to reform a broken care service and change pensions would be election manifesto commitments - so everyone gets a say in this matter in any event.
It'll be interesting to see how other political parties respond to these significant proposals.
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AIU the proposed system will keep up with earnings growth . The problem is that the triple lock has meant the SP has been increasing above earnings growth.
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There do seem to be a number of commentators suggesting that not enough will be saved by the change to provide the sort of money likely to be needed for a "free at point of need" National Care Service. So unlikely IMO that taxation would go down (or even remain the same) in order to fund it, however necessary the scheme is.
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The time for the triple lock has not past. It is essential that links to both inflation and earnings remain to ensure future pensioners are not left in either absolute or relative poverty, though the 2.5% link could be arguable. However it should be implemented in a way that sustainably achieves that objective. Andy Burnham's proposal that appears to calculate the earnings link over a longer period should do that and should be welcomed.
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I would be very surprised if the Care Service could be funded from this saving alone, but it certainly makes sense to review this scheme - if not because it has served a purpose and is potentially unsustainable in its present form.
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It will not fund a new care scheme full stop.
However it is politically a clever way of selling modifying the triple lock, by linking it with advantages for older people needing care.
A way to credibly to try and fend off all the political flak it will bring.
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