Pensions - Articles - Chancellor sticks with Manifesto on taxes and state pensions

 “He has also so far honoured another headline manifesto commitment, the state pension triple lock, which grants increases at the highest of price inflation, earnings growth or 2.5% each year. This is a particularly expensive commitment and there will no doubt be heated debate on its future affordability and fairness, particularly if we see a sharp bounce back in earnings growth which could grant state pensioners another inflation busting increase. Every 1% increase to the state pension adds around £1bn for every future year to the Government’s unfunded pension liabilities, which then creates a ‘pay as you go’ burden onearners below state pension age.

 “Sticking to manifesto commitments would in most circumstances be the honourable thing to do and breaking any is clearly not something which should be done lightly. But sticking with the state pension triple lock as well as the tax triple lock leaves the chancellor grappling with more locks than Houdini. The extreme circumstances we face post pandemic mean commitments made before just wouldn’t be made now and at some point in the near future, the Government may need to provide the nation with further honest facts and allow the chancellor to ‘break free’.”