Conservatives to retain UK pension triple lock in manifesto https://t.co/9bGQhKY5NG via @ft
— Josephine Cumbo (@JosephineCumbo) March 25, 2024
This is by far and away the most important statement made by this Government on its future intentions for pensioners.
It will infuriate many people, including some pensioners who do not think the triple lock is affordable or desirable. Baroness Altmann is one of them – and she’s not only a pensioner, but a Conservative peer.
I take the other view. I do not think that there is a proper state pension in this country, even with the vast improvements that triple lock revaluation has brought us in the last ten years.
The safety net is too low and many find it not enough. Many people are in pensioner poverty and take up of the hard to claim pension credit with its difficult means test, is still too low
But more importantly, securing the triple-lock till the end of the decade (as the Conservative have just promised) is a policy statement that puts Labour in a position where they can do no other than to follow on. This from Jo’s report on the BBC news item on Sunday morning.
Having spent a day with the Trades Union Pensions Officers two weeks ago, I can confirm that the retention of the triple lock is the least that is expected. The TUC is calling for a withdrawal of recent increases in the state pension age and no further acceleration towards 70.
The complicity of the pensions industry
If I could use no other argument for retaining the triple lock, it is that the pensions industry is agin it.
There are two reasons that the private pensions industry lobbies against it
- It suggests to many people that private pension saving is unnecessary
- It uses up tax-payer resource that could be allocated to tax-relief.
Jeremy Hunt is to be congratulated for sticking to his guns. The indirect means of lifting the low earners out of poverty includes ingenious nudges into workplace pensions and sidecar savings. But these are not VFM when it comes to reducing pensioner poverty, while increasing the state pension is.
The increases we bake into the State Pension in the next five years will be there for generations to come. Unless you are a conspiracy theorist who believes that the drawbridge will be pulled up on Generation X and generations after, this is a long term commitment to make retirement a thing to be looked forward to – especially for those for whom work is hardest.
It could be argued that the state pension could be better targeted if means tested but it enjoys the support it does because it is universal and the cost of means testing is substantial, both in financial and political terms. We love universal benefits and the NHS and State Pension are the two universal benefits that get universal support. Both are supported by national insurance which may be a tax on work but could well be a tax on pensions. If you want a progressive means test , use the tax system.
I was shaken from preparing breakfast on Sunday morning by the Chancellor’s announcement. I – like Jo – rushed to my keyboard.
Chancellor pledges to keep triple lock for the lifetime of a next Conservative Government #bbclaurak
— Henry Tapper (@henryhtapper) March 24, 2024
If you could choose between the retention of the state pension’s triple lock or the introduction of the 2017 AE reforms, which would it be?
It is hard to be optimistic about the direction of travel in providing income beyond work.
It would be helpful if the State Pension were linked to the living wage along with other state benefits. I know that having the end in mind before starting a journey is not fashionable but the random walk through endless tweaking of sticking plaster legislation is no solution.
The pension promise sold to the population in the 1970’s was that of deferred taxation on income.
The promise was a lie. Dividend taxation and LTA destroyed faith and confidence in using pensions as a reliable source of income beyond work. Now pensions are seen as underwriting the gilt market.
Borrowing to consume is practiced by both government and the majority of the population.
6% are interested enough to take and pay for advice. A 90% shrinkage in the number of advisers reflects the enthusiasm for giving advice.
“New model adviser” another meaningless chant without substance.
Innovation is stifled.
Most people do not need advice, select a Global tracker fund.
Most Financial advisers will do the same.