State pension latest: Downing Street in major triple lock update amid fears over reforms
Dominic Raab has insisted the triple lock pension will not be scrapped but he did note he doesn’t want to make predictions on the next Budget. The triple lock pension, which has been in force since 2010, acts as a safeguard for state pensioners’ incomes and helps to protect their spending power. Each year, the state pension increases in line with either inflation in the year to September, a “floor” of 2.5 percent, or earnings, whichever is higher.
Nick Ferrari asked the Foreign Secretary: “Is it true that the Chancellor is eyeing the so-called triple lock pension pledge?”
Speaking on LBC, Mr Raab said: “We’ll keep all our manifesto commitments. There are no plans to touch the triple lock.
“Of course, I don’t want to pre-empt the Chancellor’s Budget.”
It comes after the Financial Times reported that Chancellor Rishi Sunak is preparing to break the pledge, amid Treasury fears that the policy could soon become unaffordable.
Downing Street has also played down reports that the “triple lock” on pensions will be abolished as a result of the coronavirus financial crisis.
But a Number 10 source told a Westminster briefing: “These are unique and challenging economic circumstances and we cannot hide from that.
“As you know, decisions on tax and pension policy are set out at Budget by the Chancellor but there are no plans to abolish the triple lock and we will always stand by pensioners.”
Asked if it could be suspended for a year or two, the source said: “I’m not going to speculate on what inflation might be in future.”
It comes as a report suggested pension savings could help to plug gaps in the UK’s infrastructure and boost the recovery of the economy.
Legal & General said regions across the UK are calling out for investment in transport, homes and energy, to bring infrastructure up to where it needs to be to support society’s needs.
This regional activity would also help unleash the economic stimulation and employment opportunities that the UK desperately needs as it looks to recover and rebuild following the impact of Covid-19, it argued.
The infrastructure investment gap over the next 10 years could reach £1 trillion, according to Legal & General’s estimates.
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But it argued that insurers could potentially help to plug some of the “mega gap”.
It estimates that between £150 billion and £190 billion could be invested in infrastructure by insurers and other providers.
Insurers could help fill the gap through pension risk transfer (PRT) schemes, it argued.
PRT happens when an insurer takes on a company’s defined benefit (DB) or final salary pension scheme, including assets, liabilities and risks, from trustees. It then commits to paying pensions as agreed.
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