The pensions triple lock, a formula used to decide the annual rise in the state pension for the past 15 years, has sparked renewed debate as Prime Minister Andy Burnham is expected to address it in his first Labour conference speech as party leader this afternoon.
To its supporters, the scheme has been vital for bringing the British state pension closer to similar economies in terms of generosity, and that work is still not completed. To its detractors, it is swelling the welfare budget at a rate that will quickly become unaffordable, and maintaining it without any tweaks will require cuts to vital public services.
What is the pensions triple lock?
The triple lock was introduced by the Conservative-Liberal Democrat coalition government and first came into effect in 2011. Under the policy, the state pension rises each year by the highest figure out of wage growth, inflation, or 2.5%.
As a result, it essentially guarantees the state pension will increase faster than earnings. Since 2011, the benefit has risen by 81% while average wages have risen by 59%. According to the Institute for Fiscal Studies, the UK is now in a situation where the average pensioner is at least as well-off as the average working-age person.
Why are people wanting to get rid of it?
As the British population gets older, with more people receiving the state pension each year, it will become harder to sustain a system where that pension rises at a faster rate than wages. According to the Resolution Foundation, spending on the state pension will make up nearly half of the increase in welfare spending by the end of this decade.
Andy Burnham is planning a very expensive new social care system for England, as well as a number of other pricy commitments. He may find it challenging to fund that alongside an unreformed triple lock.
Why are people wanting to keep it?
Today, Unite the Union general secretary Sharon Graham said scrapping the triple lock would be ‘morally wrong’. Speaking to BBC Radio 4’s Today programme, she argued: ‘Going to a group of people who are getting around £12,500 a year in order to pay for it [social care], to take away their security, is wrong.’
The triple lock is also popular, with polls showing it is supported by Brits no matter their age. With older people voting in bigger numbers than young people, it’s often suggested that making changes to the policy would have serious electoral consequences.
What time is Andy Burnham speaking?
Prime Minister Andy Burnham will make his speech to the Labour Party conference at 2pm today. It’s expected he will address his social care proposals and his plans for greater public control of facilities such as water and energy.
