UK Report Suggests Removing Triple-Lock Mechanism For State Pension
The CBI-commissioned review claims that the triple lock mechanism that protects state pensions for the Baby Boomer generation needs to be scrapped. Former CBI Leader John Cridland’s review suggests a few things that may increase state pension age, which concurs with a government-sponsored review of the same matter.
According to Cridland’s report, the state pension age could increase to 66 for both men and women by October 2020 and increase again to 67 by 2026 to 2028. The report also urged abandoning the triple lock mechanism of higher inflation increasing average earning to pensions or 2.5% addition whichever is greater should be abandoned to help the government and corporation finances in the future.
The review said the UK would spend about 6.7% of its GDP on state pension if it continues to adopt the triple-lock system. By abandoning it, the country would spend almost 1% less to 5.9% GDP in the next few years. Cridland said the suggestions could be “harder to bear for the least advantaged.” He said a test of the suggestions a year before retirement could be best.
A review by the Government Actuary’s Department said the state pension age could raise to 70 by 2054 — concurring with Cridland’s estimates incidentally. The GAD report indicated that a doubling in the ratio of pensioners by 2064 is to blame for this inevitable increase.