The current plans to remove the triple lock on basic state pensions could result in a serious problem for the poorest of pensions. The majority of these pensions have already lost money with the new flat-rate pension and now they could face a double whammy with the new triple lock.
Many pensions rely on their state pensions to cover most of their necessary incomes, these are the people that will be facing the biggest losses if Tories decides to drop the triple lock. The triple lock currently guarantees a two and a half percent annual rise in pensions.
It is expected that in time we will see the pension value getting lower and more people will be pushed into poverty when they reach retirement age as a result. Those that were affected by the changes in the April 2016 pension, will be most effected with this new decision. By removing the two and a half percent minimum increase, it’s a double impact that these people will find themselves in moving forward.
The flat rate state pension is currently worth only £159.55 per week, this combines the pension credit and state second pension with the basic state pension. This used to be given to lower paid workers with a choice of top up payments, which were generous. Theresa May is believed to be considering a double lock, which is more generous than the proposed triple lock. By the end of parliament, savings could be in the region of around £8 billion.
Triple lock is being looked at a little closer after it was identified that it was behind the twenty two percent increase in the past seven years of pensioner incomes and that earnings rose by a mere twelve percent. It is believed that Theresa May is identifying if a double lock will be a more secure chose for pensions in the long run.
The triple lock does not have any effect on pension credits, thereby it doesn’t protect the poorest in any way. The triple lock doesn’t protect windows’ pensions, deferred pensions, Serps or state second pensions.