Mr Sunak is reported to be considering changes to the state pension, including the ending of the triple lock. It is understood one option being examined by Mr Sunak’s officials is a “double lock” for one year only, which would raise pensions by the larger of 2.5 percent or September’s Consumer Prices Index inflation. One senior MP told The Telegraph: “A huge rise would be unjust and we must have an exception.”
However, breaking a 2019 election manifesto pledge could prove politically difficult for the Chancellor of the Exchequer, who is under pressure to provide a plan to help the UK economy bounce back from the pandemic.
This hasn’t been the only controversy surrounding the state pension in recent months however, as analysis using The Organisation for Economic Co-operation and Development (OECD) data shows the UK’s pension is less generous compared to other countries in Europe.
The SNP warned in July that the UK state pension is the least generous of every country in north west Europe when compared to the average wage.
For example, UK pensioners receive 28 percent of the average working wage when they retire, whereas pensioners in Luxembourg and Austria receive 90 percent of the average working wage.
When looking at the net replacement rate, which measures how effectively a pension system provides a retirement income to replace earnings, the UK also ranked lower than all thirteen neighbouring European countries.
SNP work and pensions spokesman David Linden said: “After a decade of Tory austerity cuts, millions of older people are now living in poverty and the UK has one of the worst state pensions in the developed world.
“Independence is the only way to keep Scotland safe from Tory cuts, and Scotland needs the full powers of independence to protect and boost the incomes of pensioners.
“Boris Johnson should be ashamed that UK pensioner poverty has risen to a 15 year high on his watch but instead he’s cut Pension Credit, axed the free TV licence, and is slashing Universal Credit for millions of families across the UK.”
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“I think he will try and adapt the triple lock given the way earnings have moved. He could possibly smooth the earnings figures over two years or maybe even three years.”
He explained that the Treasury could “strip out” the impact of furlough and the pandemic in order to achieve a more realistic figure, similar to the plan Mr Sunak is said to be considering.
Mr Cameron continued: “An alternative is to strip out the effects of the pandemic on national average earnings growth, and that’s the one that has been talked up in recent months.
“The Office of National Statistics (ONS) last month produced its earning figures, and showed what earning growth would have been if you stripped out furlough and it also considered that most jobs lost during the pandemic were lower paid jobs.
“This month, they also gave an indication of how earnings have moved over two years – they have gone up by 7.1 percent, but over the last year, it has been 8.6 percent.
“There will be an adjustment, it will be to use the average figures or take out the distortions caused by furlough and the pandemic.”