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UK Government suffers defeat on pensions triple lock

UK Government

The triple lock mechanism guarantees state pension rises in line with inflation, earnings or 2.5% – whichever is higher

The UK Government has suffered a defeat over plans to suspend the pensions triple lock amid warnings of a ‘cost-of-living storm’ that could push millions of older people into poverty.

The House of Lords voted by 220 votes to 178, a majority of 42, to back a cross-party move to keep the link between average earnings and retirement payouts.

The successful amendment to the Social Security (Uprating of Benefits) Bill means the legislation will now return to the Commons for consideration.

MPs will be asked to vote again on whether to back the Prime Minister’s £5bn raid on pensioners incomes next year, the Mirror reports.

The triple lock mechanism, promised in the Conservative manifesto, guarantees state pension rises in line with inflation, earnings or 2.5% – whichever is higher.

The Government prompted anger by confirming that the link between state pension increases and wage growth would be suspended for a year.

It could have meant pensioners received a rise of 8.3% while many workers have been dealing with job losses, salary cuts and pay freezes.

The impact of the pandemic has skewed wage growth figures, producing a spike as a result of people having previously been furloughed and many low-paid jobs disappearing.

Former pensions minister Ros Altmann, who led the push, said: Most pensioners are not well off and will struggle to cope with the price rises the Government knows are coming down the track. We know that heating and food costs are going to rise, yet we are going to see a squeeze in the state pension, which is already very low.

She said: We already have two million pensioners in poverty and we know that pensioner poverty is on the rise again.

The new amendment would restore the link with earnings but would allow the Chancellor more discretion to adjust the pension rise to account for distortions caused by the pandemic.

Dennis Reid of campaign group Silver Voices said: This is a life-or-death matter for millions of senior citizens who survive on the meagre state pension alone, and who are in desperate straits because of the surge in energy and fuel prices.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.