MPs stand firm on the state pension triple lock
16 November 2021
Members of Parliament (MPs) have rejected the amendments proposed by the House of Lords on the Social Security (Up-rating of Benefits) Bill. The Bill will now return to the Lords for consideration after Commons sided with the government, with 300 votes to 229.
The state pension triple lock sees the rate rise by the higher of inflation, earnings growth or 2.5%. The earnings component has been temporarily suspended by the government for 2022, as earnings growth would see the pension rise by 8%. This could cost the government an additional £5 billion a year.
Pensions Minister, Guy Opperman, stated that it would be ‘reckless’ to retain the earnings link in the triple lock this year. Increase in earnings figures for this year are skewed and potentially unreliable due to the pandemic and coronavirus support schemes.
He added “ONS (Office for National Statistics) experts investigated whether it was possible to produce a single robust figure for underlying earnings growth that stripped out impacts from the pandemic and concluded that it was not possible.” Opperman is committed to retaining the triple lock in subsequent years.
As it stands, state pensions will rise by September’s Consumer Price Index (CPI) figure of 3.1%. With legislation ‘ping-pong’ now starting, we will see if any amendments to the Budget are required ahead of 2022-23. Any increases to the state pension figures will need to be funded by current workers through National Insurance contributions (NICs). With the Health and Social Care Levy being implemented in April, initially as part of NICs, raising NICs even further could have huge implications.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.