The State Pension is a weekly Government payment to those of State Pension age. The amount a person is eligible to receive in their State Pension will depend on how long they’ve been contributing to their pension in the form of National Insurance contributions. The triple lock guarantee ensures a minimum increase in the State Pension every year.
What is the triple lock?
The triple lock pension was introduced by the Conservative/Lib Dem coalition Government in 2011.
The triple lock was introduced to protect the State Pension from inflation.
Under the triple lock guarantee, the State Pension will rise by a minimum of either the rate of inflation, average earnings growth or at least 2.5 percent – whichever is higher.
Prior to the introduction of the triple lock pension, the State Pension raise was influenced by the retail prices index (RPI).
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Before the 2015 general election, the Conservatives pledged to keep the triple lock until 2020.
But when Theresa May was PM, it was widely reported some Conservatives believed the pledge should be based on a double lock rather than a triple lock.
This would have meant pension increases were only based on rises in earnings and inflation, and the 2.5 percent minimum would have been scrapped.
For the 2019 Conservative manifesto, the party pledged to keep the triple lock in place.
Is the triple lock pension at risk due to COVID-19?
According to the Financial Times, Chancellor Rishi Sunak is preparing to break the 2019 Conservative manifesto pledge over the triple lock.
Mr Sunak is said to have been warned the value of the State Pension could sharply rise unless he breaks the pledge next year.
The reports come as the Treasury stated in official forecasts that wages could rise dramatically in 2021 after this year’s dip in wages due to the Coronavirus Job Retention Scheme recovers.
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April 2021 pension payments are not expected to be affected by the dip in wages this year, due to the minimum 2.5 percent annual increase.
However, as wages recover after the end of the scheme, it could have a dramatic impact on the State Pension for the following year.
Any changes to the triple lock pension have not yet been announced by Mr Sunak.
Number 10 and the Treasury said in a joint statement to the FT: “Announcements on tax and pensions policy are for Budgets.
“The government is committed to supporting pensioners.”
Number 10 also played down claims the triple lock will be axed at a Westminster briefing.
A Number 10 source said: “These are unique and challenging economic circumstances and we cannot hide from that.
“As you know, decisions on tax and pension policy are set out at Budget by the Chancellor but there are no plans to abolish the triple lock and we will always stand by pensioners.”
Asked if it could be suspended for a year or two, the source said: “I’m not going to speculate on what inflation might be in future.”
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