State pension to rise by 2.5% in April 2017 but report shows the ‘triple lock’ promise could push up the cost by a third
Chancellor Philip Hammond hints the Tories will scrap the pension protections after 2020
THE STATE pension is set to rise by 2.5% in April 2017 but Philip Hammond has hinted the Tories will scrap the triple-lock protections after 2020.
The Government confirmed that the handouts will be bumped up next year, with weekly payments increasing from £155.65 to £159.55.
But a new report out shows that the Government's promise to keep boosting the payments could see costs rocket by as much as a third in the next three decades.
The triple-lock rule, made by George Osborne in 2010, said the Government would increase state pensions by whichever is the highest figure out of inflation, earnings growth, or 2.5%.
The Government is committed to keeping it in place up until 2020, but the Chancellor hinted in the Autumn Statement last week that it could scrap it thereafter.
Speaking in the Commons today, the Chancellor said that the policy would be "under review" as the Government must decide which policies it "can afford to renew".
He accused Labour of wanting to "spray around" commitments without knowing the costs - the Opposition has pledged to protect the state pension until 2025.
Shadow Treasury Minister, Rebecca Long-Bailey, said that his comments had caused "uncertainty and worry" to older people.
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John McDonnell, Labour's Shadow Chancellor, speaking after Treasury Questions, said: "The Chancellor's refusal again today to commit to the triple lock in the next parliament, only further proves that the Tories are abandoning older people.
Figures from the research group Pensions Policy Institute show that if it is kept as it is, the cost of providing it will raise from 5.3% of GDP currently to 7.2% by 2046.
The report found that both the automatic enrolment scheme and the triple lock would increase incomes, but hikes to the age it can be claimed meant that individuals would receive less on average.
A cross-party report into the policy last month said it should be ended as it "protects well-off boomers at the expense of working families".
Millennials, the generation that were born between 1981 and 2000, face being the first generation to be worse off than their predecessors.
With rising life expectancy, the Commons work and pensions committee wants a new earnings link for the state pension agreed before the next election, as they say it is costing too much in proportion to other state benefits.
