A FORMER pensions minister who was one of those behind the introduction of the triple-lock policy has called for a revamp that could save £3 billion a year.
Steven Webb, who was a minister between 2010 and 2015, is now a director at insurer Royal London, and in a report for them he has proposed a “middle way” on state pension policy.
Under the triple lock the state pension rises in line with wages, inflation or by 2.5 per cent, whichever is highest.
It has become increasingly expensive and there have been calls for it to be scrapped.
The Tories have not committed to keeping the policy and a review by John Cridland, a former director general of the bosses organisation the CBI, recommended it be withdrawn in the next parliament.
In his report, Webb proposed the Government retain the triple lock for pensioners who retired before April 6 2016, while those retiring after then would have their pension rises linked solely to earnings.
Webb said: “There’s a big difference between pensioners who retired 20 years ago ... for whom the state pension really matters, and someone who just retired.”
The report also pointed out that, as newly retired pensioners are on average £100 per week better off than those aged over 75, the policy would increasingly target money on the poorer group and would save almost £3bn per year by 2028.
Webb says his plan would control costs and give pension rises to those most in need.
He told the BBC: “This is the first time that someone has said anything other than scrap it or keep it.”
He added that the triple lock had made big improvements to the income of pensioners since 2010 and political parties would be concerned about the long-term cost implications “on top of increased spending on health and social care associated with an ageing population”.
However, Tom McPhail, pensions expert at stockbrokers Hargreaves Lansdown, said the plan complicated pension policy.
He said: “It would be better to review the triple lock; the level of the state pension, which was set too low, and state pension ages as a complete package.
“The challenge has always been how and when to move away from the triple lock without upsetting a key constituency of voters.”
Ian Blackford, the SNP’s pensions spokesperson, has claimed that pensioners would be £872 worse off over a five-year period if the triple lock was taken away.
Theresa May last week told Angus Robertson, the SNP’s Westminster leader, that pensioner incomes would continue to rise, but she wold not say by how much. The Government’s current commitment is to maintain the triple lock until 2020.
While the SNP and Liberal Democrats both want to see it maintained, the Work and Pensions Committee has said it should be scrapped, because it is “unsustainable” and “unfair” on younger families.
The reason pensions and the triple lock are such a big issue in the long term comes down to the country’s ageing population, with the number of people of pension age per person of working age forecast by the Office for National Statistics (ONS) to rise considerably over the next half century.
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