Claire Trott, Head of Advice at St. James’s Place, warned that freezing State Pension increases and expanding access to Pension Credit could become a pragmatic solution
State pensioners could have payments ‘frozen’ and be denied Triple Lock
State pensioners could see payments frozen and be denied the Triple Lock in the coming years – as the ballooning cost of the Department for Work and Pensions (DWP).
Claire Trott, Head of Advice at St. James’s Place, warned that freezing State Pension increases and expanding access to Pension Credit could become a pragmatic solution for the DWP and Labour Party government as the cost of paying out the New and Basic State Pension rates to millions of pensioners continues to skyrocket.
“There are options such as freezing the State Pension and increasing access to Pension Credit, which might be a more realistic and better-targeted route,” she said.
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The state pension will become completely unsustainable by 2036 — and could force us all to retire at 74 – according to reports. The lock guarantees that the state pension (worth a maximum of £11,973 this year) will rise by the highest of inflation, average wage growth or 2.5 per cent every year.
Maxwell Marlow from the Adam Smith Institute, a free market think tank, said: “Struggling workers and firms will not be able to subsidise the ballooning welfare bill for much longer. We must be clear — the state pension is a benefit, not one paid into over a lifetime, but drawn out of that year’s taxation.
“If the government is serious about securing Britain’s finances, it must suspend the triple lock immediately and move towards a system that is honest about the challenge posed by an ageing population.”
Paul Johnson from the IFS said: “This generation of pensioners is, on average, doing much better than any previous generation. Pensioner poverty is way down on the very high levels in the 1970s and 1980s, and [poverty] is indeed below that for other demographic groups.
“But there is a risk that policymakers have become complacent when it comes to pensions. Without decisive action, too many of today’s working-age population face lower living standards and greater financial insecurity in their retirement.”