Derek Thomas MP has welcomed the Treasury’s confirmation that they will restore the Triple Lock for pensions in 2023-2024.
The Triple Lock is intended to make sure that pensioners shared in the increased prosperity of working age people. It guarantees that the state pension will rise by the highest of 3 measures of growth: Price inflation; average earnings; or 2.5%.
The Triple Lock was introduced because the full state pension is one of the lowest in Europe, paying £185.15 per week. Other countries in Europe with similar state pensions already pay more – it’s £210 per week in Ireland, £237 in the Netherlands or £360 in Denmark. In countries where state pensions are based on earnings, like France or Germany, the difference is even bigger.
Last year, the Triple Lock was suspended – wages increased by 8% (mainly due to the statistical anomaly as workers returned from furlough), and the Government decided to limit the rise in pensions to the rate of inflation. But the rise is based on last year’s rate of inflation – not the increased prices this year – which has led to many pensioners struggling.
“The Government is right to support pensions in this way – I’ve seen how pensioners in Cornwall have been hit particularly hard by the rising cost of food and fuel bills, especially the heating oil that many houses use.
“The Triple Lock is a way of gradually bringing our pensions in line with the rest of Europe, and it should not have been suspended.
“This is a fair response to the cost of living, and it is completely affordable – even if the Bank of England’s predictions of 10% inflation are correct, this will only be an increase of £18.50 per week.
“Higher pensions do not lead to higher costs for businesses, which means they do not fuel inflation in the same way as higher wages. Higher wages for workers on the railway, for example, inevitably mean higher ticket prices, and higher costs for businesses using the railway.”
Derek has been arguing for the restoration of the Triple Lock since the cost of living crisis began.