House of Lords urge removal of current “pension triple lock”
So, what is the “The triple lock” ?
It guarantees that the basic state pension will rise annually by either a minimum of 2.5 per cent, the rate of inflation, or average earnings growth – whichever one of the three is the largest.
An interesting article in “The Financial Reporter” Says:
“A new House of Lords Committee report is out. It has called on the Government to remove the triple lock for the State Pension.
The triple lock was introduced by the Coalition Government in 2010. In a new report by Inter-generational Fairness, the view is that the State Pension should instead be up-rated in line with average earnings.
However the Committee say “there should be protection against any unusually high periods of inflation in the future”.
So what I understand from this is that the committee thinks that pensioners should receive some protection against price increases. Plus general improvement in lifestyles but this should not be at the detriment of younger tax payers. If the lock is not removed, this will happen.
There is a message for both pensioners and those saving for retirement. For those you who are in receipt of state pension it is important to budget and understand that prices will rise over time and pensions may not increase to compensate.
For those of you saving for retirement, understand that you need to consider FUTURE pension income and what you need to invest in order to ensure you have sufficient savings to provide an inflation proofed income.