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Jeremy Hunt says a triple lock on pensions will be in the Tory manifesto

Jeremy Hunt says a triple lock on pensions will be in the Tory manifesto
  • Written by Michael Reese
  • Business correspondent, BBC News

Video explanation,

WATCH: Laura Kuenssberg asks if the triple lock will be in the Conservatives' election manifesto

Jeremy Hunt has pledged to maintain the triple lock system to determine increases in state pensions if the Conservatives win the next election.

The Chancellor confirmed the policy pledge, which means the increase in state pensions is higher than average income, inflation or 2.5%.

Hunt told the BBC's Sunday program with Laura Kuenssberg that he was confident the “expensive” promise would be covered by his plans to grow the economy.

The business did not adhere to the triple lock.

Labor leader Anneliese Dodds told the BBC programme: “We will set out these plans in detail in our manifesto.”

The state pension is set to rise by 8.5% in April.

Hunt confirmed the current triple lock system to determine how much of a payout increase each year would “certainly” remain if the Conservatives win the general election, which must be held by January 28, 2025.

He told the BBC: “When we took office in 2010, pensioners were more likely to fall into poverty than other income groups, and now because of the triple lock we have introduced, they are less likely to fall into poverty.”

“I think this is a very important social change because unlike working-age adults, pensioners cannot work, they have retired and so we need to respect that.”

Hunt said he recognized that continuing this policy would be a “costly commitment”, but added: “You can only make this commitment if you are confident that you will achieve the economic growth that will pay for it.”

In response to Hunt's assertion, Lib Dem Treasury spokeswoman Sarah Olney said the pledge was a “shameful election trick by the Conservatives” and claimed Hunt was “once again taking pensioners for granted”.

The State Pension is a payment made by the government every four weeks to people who have reached qualifying age and paid enough National Insurance contributions. More than 12 million people in the United Kingdom get it.

In April, payments will rise to £221.20 and £169.50 per week respectively, taking the annual total to £11,502 and £8,814.

Next month's increase is set to be the second big increase in state pensions in two years, following a 10.1% rise in April 2023.

Image source, Getty Images

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The Institute for Fiscal Studies' Center for Economic Research says the policy “cannot continue forever”.

The triple lock is designed to ensure that pensioners, especially if they rely solely on the state pension, can afford higher prices, or keep up with wage increases for the working population.

It was introduced by the Conservative-Liberal Democrat coalition government in 2010, but there has been debate over whether it could continue into the long-term future due to its costs.

The cost of state pensions will be £110.5 billion in 2022-23, just under half the total amount the government spends on benefits. The official government forecaster, the Office for Budget Responsibility, estimates the level will grow to £124 billion in 2023-24.

Paul Johnson, director of the Institute for Fiscal Studies, an economic think tank, told the BBC he was not surprised by Hunt's pledge to keep the policy in place given that pensioners make up an important Tory-voting demographic.

But he warned, “It cannot continue forever and they have to give a signal when they want it to stop.”

The rate of price rise in the UK – inflation – has been high in recent years, putting pensioners, as well as working families, under financial pressure.

But interest rates remain at their highest levels in 16 years after the Bank of England recently raised them to try to slow the pace of rising consumer prices.

It has made borrowing money on things like credit cards and mortgages much more expensive for households, but it has boosted returns for savers.

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