State Pension: Triple Lock

Baroness Altmann Excerpts

Tuesday 21st January 2025 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I am certainly not going to answer for the leader of the Opposition. I will allow others who are rather better qualified than I am to do that. But I can assure her that the idea of means testing the triple lock, even if its meaning were clear, is not something we on these Benches embrace.

I can tell the noble Lord very clearly that we have a manifesto commitment that the triple lock will hold for the entirety of this Parliament. That is a huge commitment. The noble Lord mentioned winter fuel payments. Means testing those meant that a number of pensioners lost a sum of £200 or £300. By contrast, the amount of money we are investing in the state pension will mean that the annual rate will go up by up to £1,900 by the end of this Parliament.

The comments by my colleague, the Minister for Pensions, Torsten Bell, were made as a private individual when he was the head of a think tank. It is the job of heads of think tanks to think big ideas and to talk about them. However, I assure the House that Minister Bell, along with me, is fully committed to the triple lock and the Government’s commitment to it. I hope the nation’s pensioners will be delighted to hear that.

[Baroness Altmann (Non-Afl)]

Does the Minister agree that there is an inconsistency in the triple lock between younger pensioners, who tend to be better off and for whom the triple lock provides protection for their full new state pension, and the oldest pensioners, who tend to be poorer, or those on pension credit, who either have only the basic state pension triple lock protected, or, in the case of pension credit, no triple lock protection at all? Is there any plan for a review of how, generally speaking, the distribution of incomes among pensioners and the protection provided by the triple lock interact?

[Baroness Sherlock (Lab)]

The noble Baroness has raised a number of important and connected questions. Let me pick a couple of them out—as many as I can in the time. First, on the distinction between those on the old basic state pension and those on the new state pension, it is not a straight read across that people on one are getting more than people on the other. As she knows, it depends, of course, on what the national insurance contribution rates were and how many years they worked. How much contribution they made determines how much they will get. It is also a fact that many people on the basic state pension were contracted out and therefore will have occupational pensions and will have paid lower national insurance contributions as a result. Whichever of those state pensions people get, we will guarantee that it will go up by the triple lock, which is a massive investment, given the economic climate, and a huge investment in pensions.

On the broader question, the noble Baroness will know that in the second stage of the pensions review we will look at the whole question of the adequacy of pensions. We need to have in our country a system designed to be built, as she knows as a former Pensions Minister, on the foundation of the state pension but with an adequate second pension coming from occupational provision. On that, auto-enrolment, investment in the system, addressing gender pay gaps, and a whole range of questions are important. I will stop talking now as I have talked for far too long. The point is that we are investing in pensioners, we will get the pensions market working and we want this to work for everybody.