Number 10 and Treasury discuss suspending pensions triple lock
Boris Johnson and Rishi Sunak are in discussions over suspending the pensions triple lock as members of the cabinet raise their concern about a mooted National Insurance increase.
The Treasury and Number 10 are inching closer to suspending the pensions triple lock this year as Covid-related statistical anomaly would mean pensioners would get an estimated 8 per cent increase in payments.
Under the triple lock, the state pension rises each year in line with whichever figure is highest out of inflation, wages or 2.5 per cent.
The Office for Budget Responsibility, the government’s spending watchdog, published figures predicting that wages could surge 8 per cent this year.
The Sunday Telegraph reports that the government is concerned about the optics around keeping the triple lock, while also raising National Insurance to raise £10bn to put toward the NHS and social care.
The mooted rise in National Insurance will disproportionately affect low-wage workers and is not charged for people receiving the state pension.
A government source told the Telegraph: “They are having conversations about this and whether the two things can come together. They are being considered together and that’s certainly what people want to do.”
The chancellor hinted two weeks ago that he was considering scrapping the pensions triple lock for this year.
He said “I very much recognise people’s concerns” and that the triple lock “needs to be fair to taxpayers as well as pensioners”.
Sunak and Johnson reportedly agreed last week on the increase to National Insurance to help fund improvements to social care.
Five cabinet ministers told the Sunday Times that they are against the tax hike as it will hit young workers the hardest.
One said to the Times: “I don’t think it is right, particularly after the pandemic, to be asking 20 and 30-year-olds to pay more, especially when we also want them to get on to the housing ladder.”