Labour Chancellor John McDonnell is today set to unveil Labour’s pension “pledge card”, with promises expected to include:
Retaining the triple-lock - which links state pension increases to the highest of earnings, prices or 2.5% - until 2025;
Protecting the state pensions of overseas pensioners, many of whom have their payments frozen;
Providing extra help to women affected by increases in their state pension age;
Keeping “pensioner perks” such as free bus passes
Tom Selby, senior analyst at AJ Bell, comments: “This is naked electioneering from Labour. The power of the grey vote has been well documented and Jeremy Corbyn now hopes this raft of promises will help turn the tide and deliver an unlikely election victory in 2020.
“The central pledge to retain the state pension triple-lock goes against the recommendations of both the Work and Pensions Select Committee and John Cridland’s independent report, both of which concluded the policy should be scrapped. The cost of Labour’s triple-lock promise is, of course, uncertain – if earnings and inflation are below 2.5% between 2020 and 2025, for example, it could be very expensive.
“Equally, if earnings is the highest of the components it could cost nothing - assuming Theresa May isn’t planning on imitating Margaret Thatcher by scrapping the earnings link altogether.
“Labour also pledges to protect the pensions of UK citizens who have retired overseas. Some countries, notably Australia, New Zealand and Canada, do not have a ‘bilateral’ deal with the UK, meaning state pensions of UK expats are frozen. Governments have previously baulked at the cost of providing this increase, estimated at around £200m a year by 2020, deciding instead to spend money on pensioners who remain resident in the UK.”