Triple-lock state pension could be ‘suspended’ next week, fears a Covid wage disruption could add billions of pounds to government spending
- It was claimed that the triple state pension scheme could be ‘suspended’ next week
- The measure ensures that the state pension grows in line with inflation or income
- Covid wage disruptions could cause OAPs to see payments up 8% from April
- But the chancellor previously hinted that he would not go ahead with an 8% rise
The AOW triple lock could be ‘suspended’ as early as next week, it was claimed yesterday.
The measure guarantees that the state pension grows with inflation, income or 2.5 percent, whichever is higher.
But due to the wage disruptions caused by the corona crisis, retirees could see their payments rise by as much as 8 percent from April next year.
The AOW triple lock could be ‘suspended’ as early as next week, guaranteeing that the AOW will rise in line with inflation, income or 2.5% (stock image)
The chancellor has previously hinted that he would not go ahead with an 8 percent increase, saying his decision would be guided by “fairness to retirees and taxpayers alike.”
The Mail revealed last month that Rishi Sunak would temporarily abolish the triple lock because of the billions it could add to government spending. It is expected to be suspended for at least a year.
Yesterday, Bloomberg reported that Mr. Sunak could make an announcement as early as next week, though Treasury Department sources rejected the suggestion.
Another source familiar with the plans said they did not expect Sunak to allow an 8 percent increase.
Wage disruptions caused by Covid could push retiree payments by as much as 8% from April. But Rishi Sunak (pictured) has hinted that he would not go through with an 8% increase
Helen Morrissey, pension analyst at Hargreaves Lansdown, said: ‘An early decision would be welcomed as it would bring clarity to everyone.
“The current situation, however extreme, shows how important it is to review the triple lock.
“It has improved the incomes of retirees, but we need to see if the triple lock remains the best way to maintain the state pension in the long term while balancing taxpayers and retirees.”