On the go: The pensions triple lock could be scrapped in the near future as the government looks to recoup the hundreds of billions of pounds it has spent on Covid-19 support.
According to a Treasury document dated May 5, seen by the Telegraph, chancellor of the exchequer Rishi Sunak has been advised to break one of the Conservatives’ manifesto pledges and scrap the pensions triple lock on state pension rises.
According to the Telegraph’s article, the document forecasts that the UK will have a £337bn budget deficit this year, due to the amount of support offered by the government throughout the Covid-19 crisis.
Mr Sunak has been told he may have to backtrack on the Conservatives’ promise to not raise taxes this year.
The document states it would be “very difficult” to fill the gap in public spending without breaking the tax lock, and suggests to raise the revenue needed the government would either have to hike income tax, value added tax and national insurance, or reform pensions tax relief.
Other suggestions include public sector pay freezes, an NHS and social care tax surcharge, or a new carbon/green tax.
Under current rules, the state pension is increased by the triple lock, which is the highest of earnings growth, price inflation or 2.5 per cent a year.
This article originally appeared on ftadviser.com
