Expert warns on Triple Lock Plus pensions as 'retired households could lose vital safety net’

The Conservatives’ Manifesto revealed plans earlier this week for a Triple Lock Plus. Adding onto the existing triple lock which protects the state pension amount from growing stale under inflation, the additional promise aims to also increase the personal allowance for pensioners by either 2.5 percent, inflation or average wage rises.

While Labour has criticised the plan for not being “credible”, pension expert Becky O’Connor also has some concerns. The Director of Public Affairs at PensionBee explained that the Plus benefit may cause more long-term issues than it’s worth.

She explained: “The Triple Lock Plus seeks to raise the income tax threshold for pensioners, ensuring that even with an increased State Pension, it remains below the taxable income level. Over 60% of people aged 65+ paid income tax last year, as the tax free allowance for pensioners has been cut in real terms, leaving many older people worse off in retirement.”

Although this indicates that the Triple Lock Plus is a much-needed move, Becky advised that more needs to be done to “preserve the state pension” itself. She added: “Some form of index-linking is necessary as without decent and reliable rises to the State Pension, many retired households could lose a vital safety net.”

This isn’t the only dilemma the additional promise could create, particularly how it might affect the rising state pension age, which is currently at 66 and expected to hit 68 between 2044 and 2046 The expert pointed out: “An enhanced Triple Lock policy raises the question of whether a continually rising State Pension age may be required to manage escalating costs.”

As for the Manifesto’s other promises, Becky raised similar concerns around the move to abolish National Insurance for nearly all self-employed people. She added: “It’s unclear how this would affect their State Pension entitlement which is currently linked to an individual’s National Insurance record. This measure could be beneficial in closing the pension gap between self-employed and employed workers, as the former will be able to keep more of their take home pay and save it for the future.”

The expert also seemed to be in support of the 2p National Insurance cut, saying: “This proposal would see the National Insurance rate decrease from 12% at the start of this year to 6%, enabling people to save more money for the future.”