Cameron warns Brexit will threaten state pension 'triple lock'
Prime minister David Cameron has warned that the 'triple lock', which guarantees annual increases in the state pension, could be put under review in the event of a Brexit.
Speaking to the Observer newspaper, Cameron said leaving the European Union would leave a shortfall in public finances of up to £40 billion. The prime minister said this will need to be filled by either tax rises, spending cuts or borrowing more.
“You would have to start cutting things that people really value, whether it is the money going to the NHS or whether it is support for our pension system, and that could mean reviewing the triple lock,” said Cameron.
What is the triple lock?
The triple lock, introduced by the Conservative-Liberal Democrat coalition, is a guarantee that the state pension will rise each year by at least 2.5%, or the rate of inflation or growth in earnings - whichever is highest.
In its 2015 election manifesto the Conservative party pledged to extend the triple lock until 2020.
Members of the vote leave campaign claimed that Cameron was simply scaremongering. The vote takes place on 23 June.
Cameron's warning that a Brexit vote will threaten the triple lock comes hot on the heels after the Treasury claimed millions of pensioners will be worse off if the UK leaves the European Union.
The Treasury suggested that Brexit would cause a recession, send stock markets into a downward spiral and stoke up inflation. Calculations by the Treasury claimed pensioners on the state pension would be worse off by £137 per year.
Last week two separate surveys suggested that the Out campaign is gathering both momentum and support.
This story was originally written for our sister magazine, Money Observer.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).