Triple lock, stock and barrel

So Burnham, or Urban Andy as my neighbour calls him (‘urban’ as a playful opposite to ‘urbane’), thinks the provision of universal adult social care justifies breaking the State Pension triple lock, or maybe he thinks breaking the triple lock justifies fleecing the tax payer to pay for adult social care, modelled on the NHS. Not satisfied with one wasteful, dysfunctional behemoth, Urban Andy wants to burden us with a second one. 

So what is the triple lock? It’s the Government policy that ensures the State Pension increases annually by the highest of three figures: CPI inflation, average earnings growth, or a minimum of 2.5%. The policy was introduced by the Cameron-Clegg Coalition in the 2011/12 financial year to address long‑standing concerns about pensions lagging behind living costs, leaving many older people worse off. The triple lock was designed to restore the real value of pensions gradually, affordably, because a one-off adjustment would have been too traumatic for the public purse. The triple lock has faced significant criticism for some time now because, it is claimed, it costs the Government (i.e. We the People) an increasing amount, and some say it preferences the wellbeing of well-off pensioners above that of other demographics. Let’s take a look-see.

The State Pension is officially classed as an entitlement as well as a benefit. Your eligibility for it depends on having paid sufficient National Insurance contributions throughout your working life; in other words your NI contributions establish your right to receive the State Pension. It is not means-tested. Neither is it taxed at source; instead, the amount you receive is added to any other income you might enjoy (non-state pensions, investment and dividend income, part-time employment), which influences any eventual tax liability. One could therefore argue (and I do, for now) that better-off pensioners are just as deserving of the State Pension as others.

The amount you receive is dependent on your NI contributions, but it is not like a personal pension pot that offers more control and flexibility over retirement savings. The State Pension is designed to provide a basic level of income in retirement, whereas the personal pension allows for a more substantial income, paid more flexibly, and provides the ability to invest in various assets to bolster rates of return. The ‘new’ State Pension is £241.30 per week or £12,547.60 per annum and should be contextualised with the minimum wage. For those over 21, the minimum wage is £12.71 per hour, which equates to somewhere around £23,000 per annum for a full-time employee (taking holidays into account). So when I describe the State Pension as a ‘basic level’ of income, I am not being inaccurate. 

Now consider ‘other’ benefits, or welfare payments. These can be paid to those without any NI contributions to their name and, indeed, without even an NI number. This is one reason why many object to the State Pension being classed partly as a benefit. They (and I agree with them) have explicitly paid in to a fund (Government coffers), which means by rights they should have first if not only dibs on claiming money back. How’d you like it if you paid into a building society account and I didn’t, yet I withdrew some of that money?

No wonder abolishing the triple lock is a political hot potato. Urban Andy might think he’s being brave and clever announcing such intentions, but he’s actually being cowardly and simplistic. A brave PM would first face down the work-shy and the greedy, bullying Trade Unions, but he thinks pensioners are a less-threatening foe. Reform UK have announced that they won’t remove the triple lock from people who have worked and paid in all their lives ahead of excessive payments to those who haven’t. Badenoch has also vowed to keep the triple lock. The Lib Dems appear to be divided on the issue. As for the Greens, by default they’d abandon the triple lock because they’d bankrupt he country in five days and couldn’t afford to pay it. 

Urban Andy is heading the same way: by effectively replacing the triple lock with free adult social care, not only do his sums not add up, but his morality tale just got docked. How come? All our lives, we ourselves directly from our hard-earned wages and savings, i.e. not the Government, pay trained professionals to cut our hair, massage our muscles, paint our nails, fill our lips, Botox our foreheads and wax our bikini line. So why should Andy Pandy suddenly think it’s not right for us to pay for own bums to be wiped? Even the impoverished pay to be pampered, if the queues at the local foodbank are anything to go by. Let us pay our own way, helping the less well off by retaining the triple lock.

Actually, no. I have a better idea. Do away with the state pension, slash NI contributions (employee and employer), and mandate private pensions for all, funded by those in work and by their employers. No employment means a much lower pension, if any. If the workshy ever had an incentive to actually work, then this is it. Those who genuinely can’t work would then be better provided for as there would be more Government cash available for them.

Ta da!

For my next trick, I’ll reverse climate change, stop the boats, bring peace to the Middle East, train AI, and transform Zack Polanski into a decent human being.