The UK Work and Pensions Committee believes the ‘triple-lock’ guarantee on state pensions for retirees since 2010 is unsustainable and “unfair” to younger British families.
The UK Government confirmed that it would commit itself to the triple-lock until 2020.
The triple-lock guarantees that pensions before 2010 will rise by the same as average earnings, the consumer price index or 2.5% whichever is the highest.
This guarantee drove many companies and businesses to huge pensions deficits. Many rushed to resolved their deficit issues with increased difficulty.
As a result of the triple-lock policy, the state pension increased by £1,100 since 2010 with an increase of 2.9% this year just for pensioners.
Millenials — children born between 1981 and 2000 — face being the first generation in modern history to be financially troubled than predecessors.
MPs said pension costs due to the state pension triple-lock retention had cost the government more than £98bn in the last tax year.
Formulas should be included to protect pensioner still. The MPs recommneded a formula that lock pension earnings simply to average earnings during the time.
Former Work and Pensions Secretary Iain Duncan Smith defended the introduction of the triple-lock in 2010 because at the time pensioners were “most likely to be in poverty”.
But he told BBC Radio 5 live, this year alone the policy would cost £18bn more than was originally estimated so it was right to re-examine it.