The decision by the new PM to scrap the pensions Triple Lock in its current form is potentially a political master-stroke. For those relying on the State Pension, however, it’s less good news.
So why is it a master stroke by new PM Andy Burnham? And is it all smoke and mirrors?
He certainly caught many by surprise with his announcement at the Labour Party Conference earlier this week and, to be fair, I and other commentators have called for reform of the lock mechanism which has done much to improve the life of some of our poorest pensioners.
But what does it mean and will reform ever happen?
By pushing any change to the Triple Lock to 2030, as Mr Burnham announced, conveniently after the next general election which must be held by mid-2029, he has lobbed one of the hottest political potatoes firmly in the direction of the other main political parties.
They have to decide now whether to go along with Mr B’s plans, suggesting political weakness, or fight him over the issue. If they choose to fight they must present alternative reform plans. The Triple Lock could well be one of the battle grounds of the next election.
Of course if Labour loses power at the next election the Triple Lock reform plans may never happen. Mr Burnham has, however, placed the issue firmly in the public domain. Over to you now Ms Badenoch and Mr Farage.
The other big issue, as former Pensions Minister Baroness Ros Altmann has pointed out, with good grounds, is the timing of the announcement. Replacing the Triple Lock with a Double Lock (and some kind of long term earnings element in due course) is decidedly odd.
Why put the lock into play when the Pensions Commission is currently considering all things pensions and has yet to report? Another conundrum.
I think behind the move, Mr Burnham wanted to finally lance the increasingly costly Triple Lock and use the money for a new pet project, a ‘national care service.’ Now arguably, many pensioners would benefit from this, in due course, but we have yet to see the detail. The Budget at the end of the month may provide further detail.
Sadly, Mr Burnham missed out on the opportunity to once and for all deal with the mess that is the State Pension. The State Pension itself is neither high enough to be of major value to many pensioners - it's little more than half the minimum wage. Nor is it low enough to be ignored: £12,500 a year at present, going up to £13,000 a year in April is still a very significant sum for many people.
It is, however, not sustainable and too low and the government knows this. Placing the burden on current taxpayers is increasingly fraught and this needs to be reviewed.
An individually-based personal pension pot, managed by the state, makes far more sense with any money ring-fenced so that individuals get back what they have paid in, plus growth and tax relief. A national auto-enrolment style scheme for everyone would make far more sense and end the debates about Triple Locks and the like. It would also reduce the burden on taxpayers.
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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and daily news. This topical comment appears most weeks, usually on Fridays but occasionally other days. Email: