Everyone who draws a UK State Pension will know all about ‘Triple Lock’, the Government decree that ensures a fair pension rise, ensuring that it increases every year by the highest of either inflation, average earnings growth or 2.5 per cent.
In his Autumn Statement last November, the Chancellor confirmed that from April 2024, those in receipt of state pensions will receive an 8.5 percent boost after the CPI inflation number came in at 6.7 per cent.
However, with the General Election expected to be held in the second half of 2024, we can expect that the usual controversy over the triple lock will reignite very soon.
Due to soaring inflation, the state pension increased by more than 10% in April 2023, costing the Treasury £124bn. Prime Minister Rishi Sunak promised that the commitment will stay, but with around 60% of the total UK spend on welfare payments going to pensioners, is the triple lock really affordable?
Critics say it is unfair that younger people should subsidise the income of older people at a time when they may be struggling with their own living costs, however, such is the extent of the divide between the old and the young, that age is now playing an increasingly important part in UK elections.
That should ensure that both the Tories and Labour are likely to commit to keeping the popular pledge should they win, since neither will want to alienate an important cohort of voters ahead of an election. Older voters tend to vote in disproportionately higher numbers to the rest of the electorate.
Supporters say that unlike we saw with the temporary wage growth spike after the pandemic, a majority of pensioners are currently struggling with the very real challenge of high inflation while on a fixed income.
Many depend solely on the stage pension and are having a tough time paying sky-high food and energy bills.
With Spain sitting pretty at the top of the leaderboard, the UK state pension currently ranks at number 16, just above the breakeven point for pension income, the average cost of living for a pensioner, but as the cost-of-living crisis rages on, the monthly costs are expected to continue rising over the coming months. The UK also has the lowest state pension among rich countries based on one of the most cited international measures.
For the time being, any change to the current ‘status quo’ would therefore seem implausible in what is certain to be a hard-fought election, with Labour anxious not to lose its current polling lead and the governing Tories eager to catch up and overtake their challengers.
While this might be good news for pensioners in the short-term, it will mean the debate over what the state pension should be worth and when it should be paid to people is kicked down the road once again.
