Sunak should ‘step away’ from pension triple lock says Gauke
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This comes despite the Conservative Party’s manifesto pledge to protect the triple lock which ensures state pension growth annually.
The triple lock guarantees state pensions rise at the same rate as the highest of inflation, earnings growth or 2.5 percent.
However, artificial wage growth this year on the back of the ending of furlough, which meant wages were paid at 80 percent, has caused the Government a headache over its finances.
State pensions rising in line with this artificial wage growth has led to forecasts of an eight percent rise.
This would mean an extra £746.20 per pensioner.
The triple lock was announced by the coalition government in 2010 and has remained government policy since, so a move to suspend it would be a rupture with the past.
Rishi Sunak is mullling what would be a controversial suspension to the triple lock (Image: Getty)
The changes to the triple lock are being considered amid a furore over frozen pension injustice.
Frozen pensions are when a person’s state pension doesn’t rise as stipulated by the triple lock due to where they live.
This affects about four percent of pensioners, over 520,000 people, but the government has said it has “no plans” to change the controversial policy.
This happens to people when they move abroad. They still receive their pension but it is frozen at the rate it was set at the time they left the UK.
The lack of growth means their pension falls in real value year-on-year and means retirees can lose out on thousands of pounds in their retirement.
Indignation is aroused by the perception that people are being punished for making a personal decision.
Many chose to move out of the UK to be closer to their family after working in the UK.
Veterans, public servants and the Windrush Generation are particularly affected by this.
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Ann, who is 95, is one such example. She served in the Second World War and worked in the UK until aged 76, paying her national insurance just like everyone else.
However, when she chose to retire to Canada to be closer with her daughter and grandchildren, her pension was frozen at £72.50 per week.
If her pension hadn’t been frozen at this rate, she would now be receiving almost double that, £134.25 per week.
State pension rises are currently guaranteed by the triple lock (Image: Express)
The All Party Parliamentary Group on Frozen British Pensions has previously called on the Government to “urgently review the frozen pension policy given the evidence of destitution facing many UK pensioners overseas and the recent impacts of COVID-19”.
The International Consortium of British Pensioners (ICBP) recently revealed that over 75 percent of UK savers aren’t aware that their state pension could be frozen at its current rate if they choose to retire abroad.