With the recent general election and the jockeying for our votes beforehand there was some discussions had in relation to our pensions. Specifically, there was much debate around the triple lock. This blog aims to help explain to you what the triple lock is, how it works and how it affects us.
In simple terms, the triple lock is a security measure for those who receive a pension income. Introduced in 2010, it ensures that pensions grow at the greater of inflation, average earnings or 2.5%. As a result, it means two things:
- Pensions grow at a meaningful rate year on year AND
- It protects pensioners against increasing living costs.
Why was this discussed?
The triple lock has been an important topic for government candidates as some running for Prime minister want to scrap it. Why? In the UK, people are living longer than they used to with many reaching their eighties and nineties. This makes the state pension expensive for government to run particularly with the current safety guarantees in place.
As well as dividing political leaders, it has also divided the public with younger voters suggesting that they are having to pay more to enable the older generation to receive the benefits. Those who are currently receiving the state pension however suggest that without the increase they wouldn’t be able to afford the costs of living.
There has been some research conducted into the area of the triple lock which have suggested that the government should look into ways of reducing the costs of the state pension including increasing the state pension age and removing the 2.5% element of the triple lock.
If you are interested in talking to an adviser about your pensions, please do not hesitate to contact us using our contact us page enquiry box, via email to email@example.com or via telephone on 01536 512724.