Don’t celebrate the demise of the triple lock, higher taxes are coming
Andy Burnham’s tweak to the triple lock won’t save money, in fact a national social care service represents the biggest non-crisis expansion of the state in decades, says William Nixon Many commentators welcomed Prime Minister Burnham’s announcement that he will ‘abolish’ the triple lock in 2030. But bond markets had a different take. Yields on [...]
Labour leader Andy Burnham has announced plans to scrap the triple lock on pensions, sparking debate on its financial implications. However, bond markets reacted negatively, with yields on long-term gilts rising, indicating concerns about the UK’s fiscal outlook. The government's proposal to introduce a new indexation method for pensions, based on inflation or a 2.5 per cent rate, is unlikely to save the £18bn projected cost of the new social care service.
This suggests higher taxes may be inevitable, potentially requiring a 2p in the pound increase in income tax. Critics argue that the changes do not address the financial challenges, and more radical measures, such as freezing the state pension, means-testing, or implementing a private insurance model for social care, should be considered.
The proposed changes represent one of the largest non-crisis expansions in state-spending for decades, indicating a significant increase in the UK's tax burden.
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