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01 Mar 2017

MPS: Keeping triple lock could push pension age above 70

A group of MPs has warned that continuing with the triple lock pension legislation could push the state pension age (SPA) above 70, meaning that some people may not even live long enough to start receiving it, City Wire has reported.

According to a report released by the work and pensions select committee, keeping the triple lock will increase the SPA in the long-term, affecting younger people the most.

The group commissioned the Institute for Fiscal Studies to conduct the research. It found that continuing the triple lock at around 6% of GDP would result in the SPA having to rise to 70.5 by 2020 in order to cover the additional costs. As a result, young people would have to work for 50 years before receiving their state pension.

In many deprived areas and ‘super output´ areas, life expectancy is well below 70.5, the report found - meaning that poorer areas would be hit the most.

The coalition government introduced the triple lock system in 2011. It raises the state pension payments by either earnings, inflation or 2.5% - whichever is highest.

The MPS argue that there is a trade-off between the uprating of the state pension and state pension age.

They are not the first group to challenge the triple lock system. Former work and pensions secretary Iain Duncan Smith called for it to be scrapped last year, as have Hargreaves Lansdown and the Pensions and Lifetime Savings Association (PLSA).

A review of the SPA and state pension is expected to be published in March.

Copyright M2 Bespoke 2017

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