Conservatives confirm plans to scrap state pension triple lock after 2020
Existing plans to cap social care costs at £72,000 for pensioners abandoned
Conservatives manifesto pledges emphasise the importance of private savings
Tom Selby, senior analyst at AJ Bell, comments:
“The state pension triple lock has become deeply politicised ahead of the election. The Conservatives have had it in their cross hairs for a while now, whereas Labour and the Lib Dems have committed to keeping it. This is one political football that is going to affect millions of pensioners.
“The bottom line is that the triple lock is an expensive policy and Theresa May has clearly sounded its death knell. Office for Budget Responsibility projections suggest retaining the triple-lock could cost £15bn more than earnings indexation by 2060.
“A double lock of inflation or earnings after 2020 will still ensure the state pension at least increases in line with the cost of living.
“The reversal of the plans to put a £72,000 cap on social care costs means more people will have to pay more for long term care. The proposed £100,000 capital floor below which assets will be protected will include people’s houses and we are a nation of homeowners. This means large numbers of people are going to have to make their own arrangements to fund long term care or defer payment until their death.
“The proposals to scrap the pension triple lock and abandon the cap on social care costs both emphasise the importance of private savings. Less support from the Government means people are going to have to put in place their own plans to fund their retirement and long term care through greater savings in pensions and ISAs.”