City PM’s journalism is supported by our readers. .

Pension triple-lock has been spared by Hammond despite concerns it was for the chop

By:

Add as a preferred source on Google

The pension triple-lock will not be abolished during the current parliament Chancellor Philip Hammond announced in the Autumn Statement.

Some experts had anticipated the triple-lock – which guarantees that pensions to rise by the highest of average earnings, the consumer price index, or 2.5 per cent – might be for the chop.

But Hammond confirmed that this would not be the case: “Despite the fiscal pressure… We will meet our pledge to our country’s pensioners through the triple lock,” he said from the dispatch box.

Critically, however, Hammond's pledge was time limited to the current parliament – in other words until 2020 at the latest.

Steven Cameron, a pension director at Aegon said:

We welcome the Chancellor’s confirmation that it has no plans to remove the triple lock ahead of 2020.

The state pension is the bedrock of many people’s retirement incomes and to give pensioners certainty, government should not make mid-term changes to state pension commitments.

Concerns had been escalating from pensioners that the triple-lock was to be abolished after the department for work and pensions select committee published a report earlier this year proposing a move to a double-lock.

However, the problem according to experts, is that culling the triple-lock is viewed as "political dynamite". But on the flip-side, it is commitment that is costing the government a huge amount of money when it is already grappling to balance its books.

Hargreaves Lansdown's head of retirement policy, Tom McPhail beileved that Hammond "could not realistically abolish the triple-lock within the current parliament".

But McPhail said:

The Chancellor’s wording today is a strong hint that it won’t be around for much longer.

Whilst state spending on pensions needs to be sustainable, it is also important that pensions are looked after.

We are about to pass the zenith of final salary scheme payouts and pension incomes are at risk of falling back in the years to come, until the defined contributions system eventually takes up the slack.

[custom id="108"]