DWP minister Thérèse Coffey has confirmed, in a statement to Parliament, that the pensions triple lock will be scrapped for a year – reverting to a double lock for 2022/23.
The triple lock promised state pensions would rise by whichever was the largest of three figures – annual inflation, average earnings rises or by 2.5%.
On those grounds, pensioners should have been in line for an 8% rise in their weekly payouts next year.
But rather than pay this, the Government has simply scrapped the earnings element of the triple lock – promising it will return next year. This will save them an estimated £4.5billion a year.
Coffey said she was taking the measure to stop pensioners “unfairly benefitting from a statistical anomaly,” where the rise in annual earnings this year was a result of millions of people seeing their wages fall 20% while they were on furlough last year.
She added: “We can and will apply the triple lock as usual from next year for the remainder of this Parliament, in line with our manifesto commitment.”
James Andrews, senior personal finance editor at money.co.uk, said: “On one level the decision to suspend a manifesto pledge makes economic sense, with a bumper payout coming just as the Government looks for any way it can to find money to cover the cost of COVID-19 payments and earnings still down on two years ago.
“But people are bound to ask why they made that decision today when suspending the triple lock was far from the only option on the table.
“For example, it would also have been possible to move the earning element to a three-year average rather than an annual figure.
“And whatever they say, more change is coming.
“It’s quite simply mathematically impossible to maintain the triple lock indefinitely, with the promise guaranteeing pensions will cost the Government more and more every year regardless of what happens to the taxes coming in.
“A single year’s suspension might cover a statistical anomaly, but it does nothing to answer the bigger question.”
