State Pension payments offer support to older people who are eligible to receive the sum from the Department for Work and Pensions (DWP). To receive the payment, individuals must put forward a set number of National Insurance contributions throughout their lifetime. For many people, then, the state pension serves as a primary source of income in retirement, particularly useful when the regular payment of a salary or wages is lost.
Understanding the importance of a state pension to millions of Britons, the Triple Lock Mechanism is in place to protect the sum.
First introduced in 2010 by the then-coalition government, the mechanism is designed to protect the state pension in real terms.
Triple Lock sees the basic and new sum rise by the highest of three key components: average earnings growth, inflation or 2.5 percent.
For this tax year, the sum increased by 2.5 percent, but there has been discussion about the pending increase for the forthcoming year.
READ MORE: State pension: Warning as ‘low’ sum leaves millions at risk
While this has led some pensioners to celebrate a potential boost to their sum, there is concern in other camps.
Mainly, there has been a suggestion that the Triple Lock policy is not viable, and with increases set to be high, some have said it should be scrapped altogether.
Such an increase, it has been argued, is unfair for younger generations, many of whom have been impacted by the pandemic.
Others have suggested a modification to the policy, perhaps a ‘double lock’ or a temporary freeze to ensure the longevity of state pension support.
Recently, the Chancellor Rishi Sunak was pressed on whether the policy would be maintained in the future.
GB News presenter, Andrew Neil, questioned the Government’s stance on the matter.
Mr Sunak responded: “Of course the triple lock is still Government policy.
“I think formally, I have to be very careful, as I can’t comment on fiscal policy outside of events, which I’m sure you’ll understand.
“With regards to pensions uprating, there is a statutory review which is carried out later on in the year, which is then brought to Parliament.
“What you’re referring to are forecasts, but as we’ve seen over the past 12 months, we’re in a period of extraordinary economic uncertainty, and lots of the forecasts we’ve seen have moved around and changed.
“I’d put that in the bucket right now, that’s speculation, and when we get to the autumn, there will be a formal review.”
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here