Published On: Mon, Apr 8th, 2024

DWP state pension triple lock update as minister issues new statement on affordability | Personal Finance | Finance

Despite concerns about long-term affordability, Work and Pensions Secretary Mel Stride has defended the continuation of the triple lock for pensioners. The triple lock is a commitment to raise the state pension annually in line with wage growth, inflation or 2.5 percent, whichever is the highest.

As a result, starting Monday, those receiving the state pension will have their money boosted by 8.5 percent, which translates to an extra £900 per year for full rate claimants.

Mr Stride added that the long-term sustainability of the triple lock is subject to the guidelines set by the Office for Budget Responsibility (OBR). Speaking on Times Radio, he said: “This is a question really about the OBR and fiscal targets. We work all of our fiscal policy within that very clearly set out framework and that’s why your listeners will hear references to something called the headroom that the Chancellor has to play with… and there’s about £6 billion of it at the moment.”

Moreover, he stressed that any commitment like this would need to be fully financed and meet the OBR-set fiscal goals. He assured us that this would be the case at every fiscal event going forward.

Pensioners are entitled to income increases in line with inflation because “they don’t have the ability to adjust their economic circumstances”, as Mr Stride further highlighted.

Questioned on the Government’s decision to increase pensions with inflation but not to offer similar pay rises to junior doctors, he explained: “Pensioners are on fixed incomes, they don’t have the ability to adjust their economic circumstances as other people who might go out and work more hours or get a different job or seek a promotion or a salary increase or whatever it may be. Those things are typically not there for pensioners.”

“So I think we have a duty as a society now, we’ve seen what happens when you don’t take this approach and that’s what happened under the last Labour government, where we had very high levels of pensioner poverty.”

“Pensioner poverty under this government has fallen by 200,000 pensioners under the last government it was much higher.”

The Department for Work and Pensions highlighted additional support for pensioners, including last year’s state pension increase of 10.1 percent, which it hailed as the largest cash rise ever, alongside nearly £5 billion in winter assistance.

Last year’s full state pension rate stood at £10,600, set to increase to £11,500.

Mr Stride refuted suggestions that maintaining the triple lock was a tactic to win over older voters, noting that while polls indicate the Conservatives lead among over-65s, “Polls move around and I mentioned the triple lock which is really what underpins the announcement today.”

“Now, of course that was brought in several years ago and if you were interviewing me then you wouldn’t have been perhaps talking about the same kind of polling that we’re seeing today. This is a continuation of a very clear policy to make sure that we support pensioners.”

The Chancellor added: “It’s really important that people on fixed incomes are protected and they will be and continue to be under this government because that triple lock we have committed, Labour have not committed to this yet at least.”

“We have committed that in the next parliament and in our manifesto, the triple lock will continue for every year of the next parliament.”

Labour suggested it is now the “party for pensioners”, who it claimed had paid “a heavy price for 14 years of devastating Tory economic failure”.

Liberal Democrat work and pensions spokeswoman Wendy Chamberlain said: “Jeremy Hunt has taken a bolt cutter to the triple lock. This Conservative Government is picking pensioners’ pockets to try and fill the black hole caused by their disastrous economic policy.

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