Politics · United Kingdom · 1 day ago
Labour proposes changing how State Pension increases are calculated
The State Pension in the UK currently rises each April under the triple lock.
Its increase is whichever is highest: inflation, average earnings or 2.5%.
Labour says that, if it wins the next general election, due in 2029, it would remove average earnings from that yearly calculation.
The pension would still rise by whichever is higher between inflation and 2.5%, and Labour says it would keep pace with earnings over time.
The party says savings from the change would help fund a National Care Service and reduce the care costs families face.
The proposal has drawn both criticism and support.
The current triple lock would remain in place until the end of the current Parliament.
Labour plans to change how annual State Pension increases are calculated if it wins the next general election, due in 2029.
Under the proposal, increases would be set by whichever is higher: inflation or 2.5%, rather than the highest of inflation, earnings or 2.5%.
Labour says savings from the change would help fund a National Care Service.
Andy Burnham said pensions would continue to rise every year and keep pace with earnings over time.
The proposal drew criticism from Unite general secretary Sharon Graham and support from the Institute for Government’s chief economist, Tom Pope.
- Who
- Labour is proposing the change. Andy Burnham explained it, while Sharon Graham criticised the plan and Tom Pope welcomed it.
- What
- Labour plans to remove average earnings from the measure used to set annual State Pension increases. The increase would be whichever is higher: inflation or 2.5%.
- When
- The current system would remain until the end of the Parliament. The next general election is due in 2029.
- Where
- The proposal was revealed at the Labour Party Conference. Burnham explained it in a post on Facebook.
- Why
- Labour says savings would help fund a National Care Service and reduce families’ care costs and pressure on the NHS.
Labour plan supporters
Critics of the plan
Pension increase formula
Labour plan supporters
The proposal would set increases at whichever is higher: inflation or 2.5%, while earnings would still matter over time.
Critics of the plan
Unite general secretary Sharon Graham warned the plans could amount to “electoral suicide”.
Use of savings
Labour plan supporters
Labour says savings would help fund a National Care Service and provide support with care costs.
Critics of the plan
Not stated
I think this is a fairer deal for older people. What do you think?
electoral suicide
a much more sensible way to increase pensions
Why is it that when the country needs to raise money it always looks at raising it from the poorest in society i.e. pensioners and people on benefits.
The triple lock has raised the State Pension’s value faster than it would have risen if it had tracked only prices or earnings, according to the Institute for Fiscal Studies.
Labour revealed its planned change to the way annual State Pension increases are calculated.
The current system would remain in place until the end of the Parliament, according to Burnham.
- Current triple lock
- Highest of inflation, average earnings or 2.5%
- Proposed increase
- Highest of inflation or 2.5%
- Next general election
- Due in 2029
- State Pension value
- Roughly 14% higher than if it had tracked earnings, according to the Institute for Fiscal Studies
- Proposed use of savings
- National Care Service
Sources
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