MPs call for an end to 'triple-lock' pension guarantee
07 Nov 2016
A cross-party group of MPs has called for the ‘triple-lock’ on state pensions to be scrapped amid concerns that it is ‘unfair’ and ‘unsustainable’.
Introduced by the coalition government, the triple-lock ensures that the amount of state pension people receive rises annually by either the rate of inflation, average earnings or 2.5% – whichever is highest.
However, in a new report the Work and Pensions Committee argues that the triple-lock guarantee is unfair on younger people and working-age families in an economy that it claims is ‘skewed’ in favour of pensioners.
The Committee said the millennial generation – those born between 1981 and 2000 – face being the ‘first in modern times to be financially worse off than its predecessors’.
Meanwhile, many of the so-called baby boomers have benefited from rapid increases in house prices and more generous final salary pension schemes, which were once ‘commonplace’.
Chairman of the Committee, Frank Field MP, said: ‘Each generation is supported in retirement by their in-work successors. This is supported by all age groups, but a combination of factors has sent the balance out of kilter.
‘It is now the working young and their children who face the daunting challenge of getting on in an economy skewed against them.’
The Committee is proposing what it sees as a more ‘sustainable’ alternative to the triple-lock, where the new state pension and basic state pension would instead be linked to a minimum proportion of average earnings.
Mr Field added: ‘The system we propose protects pensioners and allows them to share the proceeds of future good times, but at the same time is inter-generationally fair. We call on all parties to get behind it’.