No quick fix for the pensions triple lock

The “triple lock” state pension promise has become a key election battleground, with the Conservative Party manifesto suggesting it should be downgraded.

It was in 2001 that Gordon Brown, the chancellor of the exchequer at the time, first introduced the idea of guaranteed minimum state pension increases, after being attacked for raising the basic state pension by just 75p. More than 15 years later, the issue remains a hot potato for politicians. The "triple lock" state pension promise has become a key election battleground, with the Conservative Party manifesto suggesting it should be downgraded.

Under the triple lock, the value of the state pension rises each year by the highest of price inflation, the increase in average earnings, or 2.5%. Pensioners are thus able to keep up with the cost of living, don't lose out compared to those in work, and still get a decent pension increase in cash terms, even if inflation and salary rises are very low, as they have been in recent years. However, the cost of this has led to calls for a rethink.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.