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Boris Johnson 'reviewing' triple lock to avoid record £700 state pension rise next year

Mirror logo Mirror 30/07/2021 Emma Munbodh

The Prime Minister is understood to be "reviewing the numbers" on the triple lock - in order to avoid a record rise in state pensions next April.

A Number 10 spokesperson yesterday hinted that the manifesto pledge to increase pensions by the triple lock could be overruled, saying the Chancellor would "take any decisions at the appropriate time".

Under the triple lock, pensions must each year by a minimum of either 2.5%, the rate of inflation, or average earnings growth - whichever is highest.

But thanks to the pandemic hitting GDP and the Covid recovery this year, the numbers are set to rocket, meaning an earnings boost of more than £700 for Britain's pensioners.

Expert analysis showed pensioners could be on track for an 8% boost - that would mean a huge £746.20 a year hike to their state pension payments if the formula is kept.

It's possible the Treasury may choose to suspend it for a year, or change it in some way so as not to have to dish out the extra pay.

Is the triple lock protecting pensioners? Let us know your thoughts in the comments below

Matthew Hancock, Mark Sedwill, Boris Johnson sitting at a table: The Prime Minister is keen to avoid paying a record increase © PA The Prime Minister is keen to avoid paying a record increase

Rishi Sunak is already looking for ways to balance the books to help cover the £350billion Covid bill.

Video: Rishi Sunak 'recognises people’s concerns' over pension triple lock (The Independent)

Rishi Sunak 'recognises people’s concerns' over pension triple lock

A Bank of England economist has also suggested the retirement age be increased to help spread the cost.

"We've got to ensure fairness for both pensioners and taxpayers,” a government statement said

"The Chancellor has said previously, that the triple lock is government policy. But we'll recognise people's concerns.

"We will obviously keep figures and numbers under review, as we always do and take any decisions at the appropriate time."

On Wednesday, Cabinet minister Therese Coffey has also implied the triple lock may be altered in 2022.

Asked whether the rise would go ahead, 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."

What is the pensions triple lock?

Despite popular belief, there is no state pension retirement 'pot' that is built up as we work and pay National Insurance.

Instead, the state pension for retirees today is paid by people currently working.

The state pension is usually paid every four weeks, in arrears.

Under the triple lock arrangement agreed in the Tory manifesto, the state pension must by the highest of inflation, 2.5% or average wage growth during a set period each April.

This is separate to your workplace pension which is privately invested by you and your employer. Workers over the age of 22 and earning £10,000 or more a year are automatically enrolled onto it and your employer will, in most cases, match your contributions. Anything you pay in each month is tax-free.

If you you have shortfall in your pension, you may be able to apply for pension credits to top it up.


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