Pension triple lock to be suspended as Tories break another manifesto pledge

ITV News Political Reporter Shehab Khan reports on the latest changes to pensions

The triple lock on pensions will be suspended next year, the government has confirmed, meaning the Tories have broken two manifesto pledges in one day.

Work and Pensions Secretary Therese Coffey told MPs the government was forced to scrap the guaranteed yearly increase for pensioners due to the impacts of the coronavirus pandemic on jobs and earnings.

The policy, introduced to ensure pensions do not fall behind the cost of living, will be paused from 2022 to 2023, but Ms Coffey insisted it will return afterwards.

Ahead of the 2019 general election, Boris Johnson promised pensions would continue to increase each by either the cost of inflation, increasing wages or by 2.5%, whichever is highest.

Work and Pensions Secretary Therese Coffey said the triple lock on pensions would return. Credit: PA

But distortions to wages during the coronavirus crisis could have meant pensioners receive a rise of as much as 8% - it would amount to an extra £3 billion being paid out next year.

Instead next year's increase will be based on either 2.5% or inflation, Ms Coffey said.

The announcement came shortly after Prime Minister Johnson accepted he was breaking a separate manifesto policy by increasing National Insurance contributions to fund social care reforms.

Again, he said the government was being forced to break a promise because of the impact of coronavirus.

Explaining why the triple lock on pensions was being paused, Ms Coffey told MPs there had been an "irregular statistical spike in earnings" over the period during which the pension rate is set.

She said the decision to remove the earnings benchmark "will also ensure that as we are having to make difficult decisions elsewhere across public spending, including freezing public sector pay, pensioners are not unfairly benefiting from a statistical anomaly".

She told MPs: "At a time when we have made tough decisions to restore the public finances which have impacted working people, such as freezing income tax personal thresholds at current levels, this would not be fair.

"Setting aside the earnings element is temporary and only for one year.

"This means we can and will apply the triple lock as usual from next year for the remainder of this Parliament in line with our manifesto commitment."