"This valuable guarantee for pensions comes with a high price, particularly at times of high and volatile price and earnings inflation."
Both the Conservatives and Labour have pledged to keep the pensions triple lock if they are in power after the next general election.
Speaking to LBC, pensions secretary Mel Stride said: “I think we do have a particular duty to pensioners. They are in a position where it is less easy for them to step back into the labour market. So I do think it’s particularly important that we look after them."
Asked whether the triple lock would be kept in place, he added: “I’m confident that it will be. It’s not for me to write the manifesto on air, but I think it almost certainly will be.”
A spokesman for Sir Keir Starmer also confirmed that Labour was committed to the triple lock and that it would be in their manifesto.
The triple lock secures a state pension rise in line with average earnings, inflation or 2.5% - whichever is highest.
It was suspended for the 2022/23 year due to a spike in average earnings as a result of the pandemic. However, the government confirmed in the Autumn Statement that it will be honoured this year, meaning the state pension will rise in line with September’s CPI figure, resulting in a 10.1% increase.
Steven Cameron, pensions director at Aegon, commented: “Aegon welcomes the early pledges from the Conservative and Labour parties that they will keep the pensions triple lock if in power after the next general election. It’s really important that both retirees and those of working age have this information before voting. The triple lock guarantees that the state pension will rise by whichever is the highest of: inflation, 2.5%, or average earnings. However, this valuable guarantee for pensions comes with a high price, particularly at times of high and volatile price and earnings inflation.
“One way to control increasing costs is to increase the state pension age, faster than currently planned. There will be some people who are happy to see the triple lock continuing, even if it means state pension age has to go up to balance the books. Others might have preferred to keep their entitlement to claim state pension at the current state pension age, even if that meant the triple lock’s generous increases had to be constrained. So, if the likely outcome is the triple lock stays and state pension age increases, it’s even more important to give individuals the new option to take their state pension slightly earlier at a reduced level. Baroness Neville-Rolfe in her recent report on state pension age recommended the Government consider this and we’d strongly support early analysis of how this might be delivered.”
