Friday, 19 May 2017

Conservatives would drop third hasp of pensions lock

I have written in the past that 2.5% was too high as the fall-back in the pensions triple-lock, but I did not advocate doing away with it altogether, as Mrs May threatens to do. Instead, I proposed a figure more in line with our long-term growth rate.

However, I am informed by a party colleague more au fait with these things that the UK state pension still lags behind the EU average and that the 2.5% would take us towards that. On the other hand, the prices index component of the lock looks like predominating over the period of the next parliament as the effects of the reduced value of sterling continue to feed through. So perhaps a one-off increase to achieve parity is called for.

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