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Press comment: ONS stats shows unwinding the triple lock for the state pension will be a political hot potato


If you are covering the Office for National Statistics publication on the effects of taxes and benefits on UK household income for 2018, please the following comment from Quilter’s head of retirement policy, Jon Greer:

Jon Greer“Working age benefits like child benefit and jobseeker’s allowance have been frozen, meaning that in real terms their value is declining every year by the rate of inflation. This disproportionality impacts low income households of working age that are more likely to be in receipt of these benefits and for whom they are likely to make up a larger share of total income.

“In contrast, the main retirement age benefit, the state pension, enjoys watertight protection from the corrosive impact of inflation. The triple lock guarantees an annual increase in the state pension of at least 2.5% even if inflation and wage growth is lower. As a result, we have seen a ratchetting up in the state pension because prices and wage inflation have been relatively flat. That protection seems incongruous at a time when working age benefits are being frozen, especially when retired households have seen their financial position improve relative to younger generations.

“The average value of benefits received per household decreased more than 10% in real terms when the state pension is excluded. That illustrates there is a big divide in the treatment of retired household’s benefits.Any government faces a difficult challenge here.

“Many retired households are highly dependent on the state pension as a source of income and curbing growth in state pension benefits is unlikely to be popular with older voters. That is why in recent elections the major parties have been reluctant to unwind the triple lock, even though it was only intended as a temporary measure to bring retirement incomes up. Over the long-term if it remains in place it will guarantee that retired household benefits will rise faster indefinitely.

“The important thing for individuals to recognise is that despite growth in retired household income over the last decade, this cannot last forever. Nobody should assume or take for granted that their own retirement is assured. The triple lock will eventually be removed and in any event, it is only designed to provide a base-level of retirement income. Only private pension savings will deliver the kind of prosperity in retirement that many of us aspire to.”

For more information contact

Michael Glenister020 7778 963807469
Alex Berry023 8072 626007741

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Investment Platform in 2020)
  • Quilter International (previously Old Mutual International)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.