Pensions triple lock: Experts calculate the political hot potato may only be worth a couple of quid but is worth keeping in place

 
Oliver Gill
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The pensions triple lock has been in place for seven years (Source: Getty)

As the major political parties prepare their manifestos for the upcoming General Election, the eyes of many retirees will focus on what the Conservative party plans to do about the pensions triple lock.

Labour has promised to keep the triple lock, which guarantees state pensions rise at the highest of average earnings, inflation, or 2.5 per cent, until 2025.

Meanwhile, the Conservatives previously pledged to leave the triple lock untouched until the end of the current parliament. However, such a promise was made before Prime Minister Theresa May called a General Election. May has subsequently declined to commit to keeping the mechanism in place.

Read more: Political parties need to be specific on pension policy, say experts

But the latest research by pension boffins at Hymans Robertson indicates the triple lock only means pensioners receive a couple of quid extra each week.

The basic state pension in 2017/18 is £122.30 per week, but would be £120.26 if the double lock (which removes the 2.5 per cent floor) were employed. If pensions were only increased at the rate of inflation, the state pension would stand at £115.28 per week, Hymans Robertson said.

Political risk

Previous government analysis indicated the long-term cost of the new state pension is £8bn a year less than previous arrangements. This compares with the introduction of the triple lock, which has cost the government between £1.8bn and £2bn over seven years.

Read more: Theresa May refuses to say pensions triple lock will stay in manifesto

With such figures in mind, Hymans Robertson partner Chris Noon said: "The political risk may simply not be worth taking.

As there are about 10m voters in receipt of state pension, it seems politically and economically more sensible to maintain the triple lock. At the very least for the course of the next parliament.

Noon's remarks come after former pensions minister Ros Altmann said she expected the government to keep the triple lock in place until 2020, with increases thereafter.

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