Short reprieve for triple lock on pensions

The uncertainty around the future of the triple lock seems to be over, at least for the short term. The new Secretary of State for Work and Pensions, David Gauke, has confirmed the current mechanism for increasing State pensions, which sees them increase each year by the higher of the average increase in wages, inflation or 2.5%, will remain in place until 2020.

However, he confirmed that he believed it could not remain indefinitely. Speaking on the topic Mr Gauke said “If you look at what the triple lock does, it has a ratchet effect, because pensions go up by the higher of inflation or earnings, and in some years it will be one, in some years it will be the other. But over a period of time, it will mean that a greater and greater share of GDP goes to paying the state pension, even without any increases in pensioner numbers, because that’s just the way it works. Do I think that in 10, 20, 30 years’ time we will still have a triple lock? I cannot see in all honesty how we can.”