Years of recession escape are catching up with us

Where do you stand on the triple lock? The hottest of government policies introduced over a decade ago under the Tory Lib Dem coalition.

Loved by those who receive their state pension and disparaged by those who pay it through national insurance contributions who fear that the whole system will collapse when they retire, the renewal of the commitment lockdown in his 2019 manifesto left Prime Minister Boris Johnson and Chancellor Rishi Sunak with another unenviable move.

The commitment means that the government must increase the state’s pension payment each year by the greater of 2.5 percent, inflation, or average earnings.

The latest of those measures rose 8.8% in the past year, according to Office for National Statistics data released last week. The figure released next month could determine whether retirees across the country are getting up to £ 15 more per week.

Speculation has rioted over the past seven days, spanning the gamut from ‘never liked it anyway’ to ‘scrap it now’ to ‘yet another political decision to be made on the basis of politics, not economics ”to the stories of those who completely depend on him for survival.

Two former pension ministers, Baroness Ros Altmann and Steve Webb, both said removing the triple lockdown completely would be politically catastrophic and put the country’s retirees under even greater financial pressure. The UK state pension is already low compared to our international peers.

So what can they do? I have seen suggestions ranging from a one-year suspension of the inflation element to earnings. Consumer price inflation was 2.1 at last count, meaning that 2.5 percent of the state pension would be announced. The Times wrote confidently on Saturday that “government plans to lift lockdown for one year and apply 3 percent increaseOn the grounds that flawed data comparisons produce flawed logic on which to base fiscal policy makes no sense.

Another suggestion, courtesy of Tom Selby of AJ Bell, is to remove the ‘distortion data’ relating to the pandemic, along with the bonus earnings, leaving the underlying earnings somewhere between 3.5% and 4.9%. .

The Office for Budget Responsibility estimates that a one percentage point increase in the rate creates an additional £ 0.9 billion in pension spending, money the Treasury can barely afford.

Write in Sunday mail, Rachel Rickard Straus points out that the elderly are already washed out to consolidate public funds. Gone are the days of free TV licenses, more time to get a free bus pass, and an ax dangerously hanging over free prescriptions for those over 60 too.

It’s no secret that teens and twenties have been hit hard, with the pandemic limiting their chances of employment. Home ownership for a 19-year-old is a pipe dream. Will the state pension even survive their pensions?

The triple locking debate makes one thing clear: None of this is fair to anyone.

But Western economies have been fleeing recession for almost 15 years now, pumping more and more money into their systems to avoid the horrors of massive job losses, foreclosures and the double harm of soaring inflation and financial losses. high interest rates.

This is where this path has led us.


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