Labour will commit to retain the state pension triple lock if elected, according to media reports.
The party’s general election manifesto is yet to be released, however according to reports in the i yesterday (February 19) this commitment will be included.
In the Autumn Statement, chancellor Jeremy Hunt committed to the triple lock in full by increasing the state pension by 8.5 per cent this April.
This meant those with the ‘old’ state pension would receive £8,814 per year while those with the ‘new’ state pension would receive £11,502.40 per year.
According to Tom Selby, director of public policy at AJ Bell it is “no surprise” Labour has decided to commit to the triple lock.
He said: “Any shift away from the pledge, however sensible, would have risked being the centre of an attack campaign by his political opponents. Given the importance of securing support from older voters, sticking with the triple-lock is likely viewed as the easiest option politically.
“That does not mean the decision represents good policy, however. Any politician that advocates maintaining the triple-lock is effectively admitting the state pension is too low.
"But rather than putting in place a plan to increase the value of the state pension to a level deemed ‘fair’, the triple-lock randomly ratchets up the state pension in real terms depending on earnings growth and inflation at a specific point in time each year.”
Selby believed reaching a general consensus was key to state pension certainty and suggested there were other “sensible” alternatives to the triple lock.
“The Institute for Fiscal Studies’ recent suggestion that the government sets out what the state pension should be worth in relation to median earnings is a sensible one. It would certainly be a much more coherent way forward than the current approach, which is entirely aimless.
“Once you have set a clear goal for the value of the state pension, you can plot steady increases to reach that value. Similarly, building greater certainty into future state pension age increases would help give savers confidence that the goalposts won’t be moved,” he added.
Selby urged the government to “come clean” with voters about the state pension.
He said: “Failure to do this will mean the state pension remains mired in uncertainty. An independent review with cross-party support feels like the only way to break the hold the triple-lock has on discussion about the future of the state pension.
“Politicians need to be brave enough to kick-off an honest debate about what the state pension is aiming to deliver in retirement, how it should look over the long term and the associated costs. Without that, we risk remaining in a triple-lock-induced Groundhog Day where the only real question is whether or not that policy will be retained.”
It comes after Labour said it would look into whether the current pensions framework delivers sustainable retirement outcomes for individuals earlier this month (February 1).
