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Image source, PA Triple lock pensions will change from 2030, says Prime Minister Andy Burnham. Andy Burnham says he wants to use the money saved by changing the scheme to pay for something else - a new public service. Mr Burnham describes it as a "national care service", saying it would provide social care and be free at the point of use.
But what does that mean? And what are the arguments for and against the triple lock? We explain it here.
What is a pension? Image source, Getty Images Pensions are pots of money that are paid to people once they decide to stop working, or when they reach a certain age. It's what many people use to help them pay for the things they need when they are no longer earning money, what's known as a wage .
There are different kinds of pension, but the one that Prime Minister Burnham is talking about is a state pension . A state pension is a regular payment from the government that most people can claim when they reach a certain age. What is the pension triple lock?
Image source, Getty Images In 2010, the government at the time announced something called the triple lock. It was first put in place in 2011. The idea behind the triple lock was to make sure the state pension rises in value every year, so that people would be better off when they retired.
The triple lock works by making sure that the state pension goes up by inflation , wages or by 2.5% - whichever is highest. Inflation: The amount prices have gone up in general over the year. Wage increases: This is when people get paid more to do their jobs - the government takes the pay of all the workers in the UK and works out the average. 2.5%: If neither inflation or wage increases hit 2.5%, then the state pension goes up by this amount.
Why does ending the triple lock pension matter? Image source, Getty Images The triple lock pension was created to stop pensioners - people who use a pension - from being pushed into poverty. Supporters of the triple lock say it makes sure that all pensioners have at least a basic standard of living.
They say that the triple lock is a good way to protect pensioners when prices are rising quickly, like they have in recent years, People who want to change the triple lock say that it did a good job at lifting pensioners out of poverty, but that it also benefitted wealthy pensioners. They say that it is unfair on younger people who are working to keep paying more tax on something which gets more expensive every year. What has the prime minister announced?
Image source, Getty Images At the Labour conference in Liverpool on Tuesday, Mr Burnham announced the triple lock would change to a double lock . He said from April 2030, following the next scheduled UK general election, the state pension will continue to rise every year by inflation or by the 2.5% figure. Mr Burnham said this will mean the government could save money to pay for his proposed national care service.
The prime minister said the national care service will be "a landmark policy", which he argues will be as important as the creation of the National Health Service (NHS). Andy Burnham says he wants to create a social care system where "everyone contributes and everyone is covered". It would be free at the point of use, with no care charges paid out of basic state pensions.
What has the reaction been? Image source, Getty Images The boss of the independent research group - the Institute of Fiscal Studies (IFS) – told Sky News that the change to triple lock was "huge news". "It's hard to say exactly how much money it will raise, because it depends on how earnings pan out in coming years," she said.
But Kemi Badenoch, leader of the opposing Conservative party, argued that however much money it saved it wouldn't be enough to fund a national care service. And Sharon Graham, boss of union Unite, argued that pensioners would "get a raw deal" from the changes. "Why would you be looking at the pot of pensioners rather than the super rich," she told the BBC.
Source: bbc.co.uk
