The Triple Lock is becoming increasingly unsustainable, it has been warned.
All 13 million state pensioners could have ‘welcome’ tradition scrapped
State pensioners have been warned a “welcome” tradition could be axed – with lower payments from the Department for Work and Pensions (DWP). The Triple Lock is becoming increasingly unsustainable, it has been warned.
Spencer Churchill Claims Advice said that, even though the rise is welcome, it raises “serious questions about long-term affordability and the likely impact on workers”. The state pension is claimed by over 13 million retirees.
A spokesperson for the claims firm said: “This increase of up to £550 a year will be very welcome for millions of pensioners who are finding it increasingly difficult to keep up with rising living costs.
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“However, the policy is becoming significantly more expensive for the Government every year. The triple lock now costs far more than originally forecast which increases the strain on an already tight Budget.”
The spokesperson added: “Analysis from the Office for Budget Responsibility has highlighted that the triple lock is now costing around three times more than expected when it was introduced.
“Pensioners will benefit immediately but the wider question is how these increases will be funded in the long term without shifting the financial burden onto working households.”
Theu added: “There is a delicate balance between giving pensioners stability and protecting the retirement prospects of those who are still saving.”
Speaking out in the wake of the Labour Party Budget, the Guardian gave the example of a pensioner on the basic state pension is worth £241 a week, £963 a month or £11,550 a year. He qualifies for £200 winter fuel payment.
Next year, under the “triple lock” policy, the basic and new state pension payments will go up by 4.8% to £184.92 and £241.30 a week respectively.
But Age UK warns the decision to freeze the income tax personal allowance for another three years will drag more older people into paying income tax, including some on low and modest incomes (the government has pledged to ease the administrative burden for pensioners whose sole income is the state pension).