The Labour Party is gearing up to win the hearts and minds of older voters with the unveiling of its ‘pensioners pledge card’.
Today, shadow Chancellor John McDonnell announced four key commitments to pensioners in a bid to secure their vote.
These are: a commitment to the triple lock on the state pension until 2025 - where pension payments rise in line with either average wages, inflation or 2.5% - whichever is highest; to protect the state pension for overseas pensioners, many of whom have seen payments frozen; additional support to women who have been hit by increases to state pension age, as well as the maintenance of so-called ‘pensioner perks’ including free bus passes and the winter fuel allowance.
However, Tom Selby, senior analyst at Sipp provider AJ Bell described the move as “naked electioneering”. He says: “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.
Tom McPhail, head of pensions research at Hargreaves Lansdown agrees. “The triple lock has been an important measure to improve pensioner incomes but it is clearly not sustainable in the long term and could even contribute to intergenerational tensions. It was probably rash of Mr McDonnell to make such a pledge at this time.”
What about the other major political parties?
The Conservatives have pledged to maintain the triple lock until 2020 but it has not clarified its position beyond that date.
Commenting on the announcement from Labour, Kelly Tolhurst, MP for Rochester and Strood says: “Labour’s economic mismanagement hit older people hard when they were in government, and Jeremy Corbyn and John McDonnell’s reckless plans would do the same all over again.
“Our careful management of the economy, changes to help people save more for their retirement, and protections for pensioner benefits and the State Pension are all helping people have dignity and security in retirement.”
The Liberal Democrats are also yet to confirm their stance.
Steve Webb, former pensions minister and now director of policy at Royal London says: “All political parties were committed to the triple lock at the time of the last General Election and I would expect to see the policy maintained up to 2020.
“Beyond this, all parties will be seeking to balance the support given to different age groups. Within any package of support for older people they will also be weighing up the merits of relatively generous uprating of the state pension against other spending pressures such as the need to do more on social care and the NHS.
“If inflation and headline earnings growth continue to pick up however, the cost of guaranteeing a 2.5% underpin on pension rises may be relatively modest. It is worth noting that the state pension in the UK is still at a low level relative to most of Europe and further improvement through maintaining the triple lock would be of particular benefit to retired women, for whom the state pension forms the majority of their income in retirement on average.”