UK’s business group calls for smaller state pension increases ahead of budget

The British Chambers of Commerce (BCC) has urged the UK finance minister to alter the state pension system before the government's first budget meeting next month. The BCC proposes replacing the triple lock mechanism, which guarantees annual increases in the state pension based on whichever is highest among inflation, wage growth, or 2.5%, with inflation-linked increases. This switch could potentially free up £3.3 billion (US$4.5 billion) over two years, according to the BCC's submission to the government.

The business lobby group suggests that these savings could be allocated to cover some of the expenses related to extending a zero rate of employer National Insurance contributions for workers aged 21 to 24. The BCC also recommends lower business energy costs, business rates relief, and additional export support. The group believes that weak confidence and rising costs are hindering investment in the UK economy.

The BCC's recommendations are made in anticipation of John Healey's first budget presentation, which is scheduled for the following month, and his first significant speech as finance minister on Monday.