Chancellor Jeremy Hunt made no mention of the State Pension Triple Lock despite the growing debate around the affordability and sustainability of the uprating mechanism during the Spring Budget on Wednesday. Under the Triple Lock measure, State Pensions increase each year in-line with whichever is the highest of average annual earnings growth from May to July, Consumer Price Index inflation in the year to September or 2.5 per cent.
State Pension is funded by National Insurance contributions from today’s workforce, which begs the question, could the Chancellor’s further cut to National Insurance contributions have any impact further down the line? “The Treasury needs to confirm how they intend to plug the gap and if this will rely on a transfer from broader tax receipts.”
“We already know that the Labour Party intends to commit to the Triple Lock in its upcoming manifesto - although the UK Government has not made any contradictory statements, this policy demands ongoing assurances, meaning any Budget without such assurance rings alarm bells." “The value of the Triple Lock has actually been depleted because of the fixed thresholds in income tax and, in particular, the personal allowance. I do regret that income tax was not chosen as the tax to cut over National Insurance, because pensioners have lost out as a result.”