State pension triple lock ‘will be broken’ says Liam Halligan
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The State Pension Triple Lock sees the sum rise each year by the highest of three components: average earnings, inflation or 2.5 percent. This year, wages data has been somewhat skewed by the fact more people are getting into employment following the pandemic. This led the Office for Budget Responsibility (OBR) to suggest an increase of eight percent to the state pension could be enacted in 2022.
Many questioned the feasibility of this outcome, with Chancellor Rishi Sunak responding that the Government would take an action which was ultimately fair for “both pensioners and taxpayers”.
With this response leading to speculation the Triple Lock policy may be scrapped or significantly reduced, there may be widespread implications.
Indeed, one organisation has issued a warning that women are the most likely to miss out if this policy is rejected.
Research from Barnett Waddingham has found women are far more likely to be reliant upon a state pension than their male counterparts.
This has raised concerns about women’s financial stability in later life, and how many are at risk.
If the Government were to scrap the triple lock, then, it is these individuals who may feel the full force of the removal of the policy.
A study from the organisation showed 30 percent fo women do not have any private or workplace pensions at all.
This means they will have to rely only upon the state pension, which is currently worth a maximum of £179.60 per week.
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This is compared to men, where only 17 percent of those asked said they were in the same position.
However, the pension gap also widens even more in later life, creating additional challenges.
Barnett Waddingham said almost two fifths of women over 55 will rely on a state pension only, compared to 17 percent of men over 55.
The study surveyed over 2,000 adults, and just over 1,000 respondents were recorded as women.
With the prospect of the Triple Lock potentially being scrapped, Amanda Latham, Policy and Strategy Lead at Barnett Waddingham, commented on the matter.
She said: “With recent analysis by the OBR predicting that state pensions could rise by as much as eight percent, the pensions triple lock has once again come under fire.
“Deemed as an outdated policy that is costly to the taxpayer, it’s very clear that there are holes in the system. Any policy that is significantly undermined by a lack of public support needs to be addressed.
“What’s crucial, however, is that any changes to state pensions consider the people whose livelihoods and retirements will face the biggest impact.
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“It is very possible that the biggest critics of the triple lock are the least likely to rely on a state pension in retirement – which as our research shows, is disproportionately women.”
Ms Latham went on to state that a reform of the triple lock was “long overdue”, however, that it is also a matter which needs to be approached with caution.
This is because Government, she added, should be bringing the policy to a quality which works for everyone.
She concluded: “Within the pensions system as a whole, we should be thinking about how to create a more fair, robust and inclusive framework that gives everybody the best chance at building financial security for retirement in a targeted way.”
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