Andy Burnham has received a major warning over the pensions triple-lock from Dennis Reed, director of the Silver Voices organisation. Reed urged the incoming Prime Minister to protect the key pensioner benefit, dismissing calls from the OECD to scrap the policy.
OECD's Recommendation Based on False Premise
Reed argued that the OECD should keep its nose out of detailed UK policies on pensions. He stated that the OECD's recommendation to scrap the triple-lock is based on the false premise that it causes fiscal uncertainty. Instead, Reed emphasised that the triple-lock is intended to protect older people from fiscal uncertainty caused by sharp rises in the cost of living or shock events like oil wars and pandemics.
"The Triple Lock is not the cause of uncertainty; it is the necessary reaction to it!" Reed said.
State Pension Value Significantly Lower Than Competitors
Reed highlighted that the value of the basic state pension in the UK is significantly lower than almost all of the UK's economic competitors. He noted that millions of pensioners rely on the state pension for their main source of income, and it is close to poverty level.
"If UK pensioners benefitted from the luxury of a state pension set at about two thirds of average earnings like most of the OECD, instead of one third, I would be happy to discuss the ending of the Triple Lock," Reed added.
Scrapping Triple-Lock Would Increase Pensioner Poverty
According to Reed, scrapping the triple-lock would cause an immediate increase in pensioner poverty. He explained that energy prices and food prices tend to rise faster than the general rate of inflation, and these costs form a bigger part of older people’s budgets than for the rest of the population.
Reed criticised the argument that the triple-lock is "unsustainable" as a much-repeated political judgement with no factual basis. He stressed that society must decide whether older people should be enabled to live in dignity and warmth in their retirement years and then find the money to make this possible.
Life and Death Consequences
Reed warned that scrapping the triple-lock would have life and death consequences for many pensioners, given the state pension is set at such a low level. He called on critics to be honest about the implications of their campaigns.
"With our state pension set at such a low level, scrapping the Triple Lock would have life and death consequences for many pensioners and the Lock’s critics need to start being honest about the implications of their devious campaigns," Reed concluded.
