Andy Burnham’s proposed triple lock changes have sparked a £1,600 warning for pensioners.
Those who retired after April 2016 receive the ‘new’ state pension, worth £12,547.60 annually. Those who retired before that date qualify for the ‘old’ basic state pension worth £9,614.80 every year, and most also get the ‘additional’ pension.
Burnham’s new plan is to increase the state pension by the highest of 2.5 percent, inflation, or the figure required to keep its relative value to average household income. The PM said the expected savings, worth billions, should be used to establish a new ‘National Care Service’ to social care in England, which is currently provided by local councils.
But new analysis shows its value will fall by around £1,600 per annum by 2050, reports The Telegraph. Pension advisers calculated the state pension should hit £35,100 annually by 2050 under the existing triple lock. Under the revised pension scheme, it will be worth £33,500 — or £1,600 less for every pensioner.
“Pensioner poverty has not disappeared and the idea that pensioners are universally wealthy masks significant disparities in retirement incomes across Britain,” Calum Cooper, from adviser Hymans Robertson, said.
The triple lock was first introduced by the Cameron government in 2012, and is now thought to cost the taxpayer £12.6bn. By 2029-30, it should cost £15.5bn, the Office for Budget Responsibility believes.
A government spokesperson insisted the ‘adjusted’ triple lock will be a ‘better deal for pensioners’. The DWP statement said: “This settlement is a better deal for pensioners and their families and ensure the state pension system rises every single year – by at least the highest of 2.5%, CPI inflation or a new earnings link.
“We are committed to the triple lock for the rest of this parliament, which will see the new state pension rise by over £2,000 and reach a forecasted record high by April 2029. The adjusted triple lock will build on the gains the policy has made for pensioners.”
