Latest news with #triplelock
The Sun
5 days ago
- Business
- The Sun
Reeves must hike taxes, scrap triple lock or CHARGE for NHS to avoid economic disaster, global finance watchdog claims
RACHEL Reeves must hike taxes, scrap the triple lock or charge for the NHS, an influential finance watchdog warned today. The International Monetary Fund said the Chancellor must make deeply unpopular decisions to tackle soaring debt, sky-high borrowing costs and weak growth – all made worse by an ageing population and ballooning pensions bill. 1 In a damning new report, the IMF declared Ms Reeves and future chancellors must either whack up taxes, axe pillars of the welfare state like the triple lock or make patients pay to see a doctor. It also argued government finances should only be probed once a year to avoid "overly frequent" changes to policy. Currently the Office for Budget Responsibility assesses if the Treasury is on course to meet its borrowing commitments twice a year. The watchdog said: 'Unless the authorities revisit their commitment not to increase taxes on 'working people', further spending prioritisation will be required to align better the scope of public services with available resources." The IMF suggested replacing the pensions triple lock with a policy of indexing the state pension to the cost of living. It also argued access to benefits and public services could be more intensely means tested, with higher income households paying for the likes of the NHS. The IMF's economic update, published on Friday, acknowledged the Chancellor's earlier attempts at welfare reform. But since it was written on July 1, Sir Keir Starmer caved to rebels on his own benches, watering down plans to tackle the ballooning disability benefits bill. That U-turn blew a £5bn hole in the government's budget. The IMF said such reforms were 'critical' to stop the public finances spiralling further. The watchdog also warned that Ms Reeves must stick to tough fiscal plans or risk disaster if the economy falters or interest rates spike. It warned political pressure from MPs for more spending could further derail the public purse. And the IMF found that planning reforms to spur housebuilding also face fierce resistance – but failure to unleash a building boom would damage growth. The latest update from its economists predicted sluggish growth of just 1.2 per cent this year and 1.4 per cent in 2026, and warned of the risk of 'stagflation' – the nightmare scenario of rising prices and a stagnant economy. Despite the grim forecast, Ms Reeves insisted the IMF's report backed her plans. She said: 'Our fiscal rules allow us to confront those challenges by investing in Britain's renewal. 'We're committing billions of pounds into improving transport connections, providing record funding for affordable homes, as well as backing major projects like Sizewell C to drive economic growth. 'There's more to do, and that's why we're slashing unnecessary red tape and unblocking investment to let British businesses thrive and put more money in working people's pockets.' Responding to the report, Shadow Chancellor Mel Stride said: " Rachel Reeves has already fiddled her fiscal targets to allow her to borrow hundreds of billions more over this parliament. She has loosened the rules and then constantly teetered on the brink of breaking them. 'In a context where the Chancellor's credibility is already in tatters, changing the goalposts a second time would run real risks with market confidence.'
The Independent
5 days ago
- Business
- The Independent
Reeves will have to raise taxes, charge for the NHS or ditch pensions triple lock, warns IMF
Rachel Reeves has been given her strongest warning yet that she will have to break a key party manifesto pledge by hiking taxes, introducing charges to use the NHS or drop the triple lock guarantee on the state pension. The beleaguered chancellor raised taxes by £40bn in her first Budget last year, partly to fund record new investment in the NHS. But now the world's most important financial watchdog has warned that she will probably have to break an election promise to raise 'taxes on working people' – income tax, VAT or national insurance contributions by employees to balance the books. In a report on the UK economy - Article IV Consultation with United Kingdom - the International Monetary Fund warned: 'Unless the authorities revisit their commitment not to increase taxes on 'working people', further spending prioritisation will be required to align better the scope of public services with available resources.' It went on: 'The triple lock [guarantee on the state pension] could be replaced with a policy of indexing the state pension to the cost of living. 'Access to public services could also depend more on an individual's capacity to pay, with charges levied on higher-income users, such as co-payments for health services, while shielding the vulnerable. 'There may also be scope to expand means testing of benefits.' The challenges Ms Reeves is facing, the IMF said, included the impact of Donald Trump's continuing tariffs war with the rest of the world as well as 'little fiscal headroom' in the UK finances.
The Sun
21-07-2025
- Business
- The Sun
Blow to Brit workers as future OAPs face working for longer for a SMALLER state pension
Ryan Sabey, Deputy Political Editor Published: Invalid Date, MILLIONS could be forced to work for longer after minister Liz Kendall announced another review of the state pension age. It is already poised to rise to 67 by 2028 — but experts say it will have to hit 74 within decades if the triple-lock is kept. Welfare Secretary Liz Kendall appeared to pave the way for the state pension age to rise ahead of schedule by launching a review to make sure the system is sustainable. 2 2 She also warned the cost-of-living crisis is stopping people from saving in private pension pots. Ms Kendall said: 'Unless we act, tomorrow's pensioners will be poorer than today's.' Her review, due in 2027, comes after the Office for Budget Responsibility said the triple-lock — which guarantees a state pension rise of at least 2.5 per cent each year — is costing three times more than originally forecast. Ms Kendall said the triple-lock is 'out of scope' for her report. The state pension age will soon rise to 67. The next increase to 68 is due in the mid-2040s, but the Institute of Fiscal Studies says it will have to be increased to 69 by 2049 and then reach 74 by 2069 if the triple lock is kept. Without rises, state pensions could exceed six per cent of GDP. Tory leader Kemi Badenoch blamed Labour for less growth and more unemployment, meaning 'less money to pay' for pensions. An estimated 15 million adults are under-saving for retirement. How to track down lost pensions worth £1,000s How will a higher state pension age affect my retirement? By James Flanders, Chief Consumer Reporter: Raising the state pension age means people will have to wait longer to get their government-funded pension, which can be tough for those who rely on it as their main source of income. It's especially challenging for people in physically demanding jobs or those with little in the way of savings, as they'll need to figure out how to cover the gap between stopping work and qualifying for the state pension. But the good news is that private pensions give you more choice. Right now, you can access private pensions from age 55, although this will increase to 57 in April 2028. If you've been saving into a workplace pension or a personal pension, you could retire earlier than the state pension age, depending on how much you've saved. You can take the money as a lump sum, set up regular payments, or even leave it invested to grow. For those with enough savings, this flexibility means you can plan retirement around what works for you. But if your private pension isn't enough, you might find yourself working longer and waiting for the state pension to kick in. It's a reminder of why starting to save early and keeping an eye on your pension pot is so important for creating options later in life.
Irish Times
21-07-2025
- Politics
- Irish Times
Sinn Féin wants 111 changes to Bill reforming ‘triple lock' Irish troop deployment
The Government is set to square off with Opposition parties over proposed amendments to its plan to reform the 'triple lock' mechanism for deploying Irish troops overseas. Public sessions were held by the Oireachtas defence committee as part of pre-legislative scrutiny of the Government's plan to remove the need for United Nations Security Council approval of Irish peacekeeping missions with more than 12 troops. The Government contends countries like Russia have the power, under the UN Security Council motion requirement, to veto Ireland's participation in missions. The defence committee must publish a report on the proposal before it is sent back to the Dáil and Seanad for further consideration. A draft report has been circulated and amendments have been proposed by Opposition parties. READ MORE Sinn Féin has submitted 111 amendments to the Bill. The committee is due to meet in private this week to discuss its recommendations and conclusions, which have not yet been agreed. While the committee is chaired by Sinn Féin's Rose Conway-Walsh , Government TDs and Senators have a majority of the membership. Sinn Féin's defence spokesman, Cork South Central TD Donnchadh Ó Laoghaire , is seeking to insert a recommendation that the Government must drop the sectionthat would remove the UN mandate requirement. Currently the UN mandate, Government approval and a Dáil vote make up a triumvirate of pre-deployment sanctions that have come to be known as the triple lock. [ The triple lock - a guardrail of neutrality, or an abandonment of sovereignty? Opens in new window ] The Bill, as proposed by Government, envisages just Government and Dáil approval would be needed in future. The vast majority of the evidence heard by the committee during the pre-legislative scrutiny stage relates to this aspect, which is by far the most contentious part of the Bill. The draft report outlines that the committee heard Ireland 'appears to be in a unique position globally' in explicitly requiring a UN mandate for the overseas deployment of military personnel as part of an international force. It outlines that some witnesses and contributors - and a majority of public submissions received - 'were clear in their view that neutrality is a key consideration which is central to the proposed legislation'. Sinn Féin is further arguing that the proposed legislation should be modified to recommend the convening of a citizens assembly to consider potential wording for a constitutional provision outlining and protecting Ireland's neutrality. The party wants a referendum to be held thereafter to 'definitively enshrine neutrality in the Constitution'. The Labour Party has also sought changes, including in connection with its concern that each overseas mission could end up being litigated to ensure it is consistent with UN Charter principles. It wants to an amendment calling on the Minister for Defence to publish details about how the new arrangements will work. It also wants safeguards against the dispatch of the Defence Forces in circumstances where it could give rise to liability for the crime of aggression before the International Criminal Court. The party also wants a change to the Bill to the effect that the triple lock would only be lifted if a proposed mission was denied UN Security Council approval due to a veto from a permanent member. It is asking for specific circumstances to be set out in the legislation where troops might be deployed under the new system and seeks for troops to remain under Irish command.
The Independent
21-07-2025
- Business
- The Independent
The government's pensions overhaul might just work... but there's one glaring omission
Britons need to save more for retirement if they are to avoid penury in their twilight years. There is no getting away from that uncomfortable fact. The triple lock – the mechanism that ensures the state pension rises in line with inflation, or wage increases, or by 2.5 per cent, whichever is the greatest – has done a fine job of reducing pensioner poverty, but, as the Office for Budget Responsibility has stated, it is now getting horribly expensive. The economy is simply growing too slowly, and the population ageing too quickly, to make it sustainable. There's an easy way to wriggle out of this bind: protect pensions by linking their value to inflation from here on out – or to earnings, if you like. You could call it the single lock. And then take steps to encourage pension saving. There – problem solved, at least in broad terms. All it took was a bit of honesty and the willingness to speak uncomfortable truths. Who knew? Except that's not what the government will do. Because, despite all its macho talk about taking 'tough decisions', it's running scared of the voters and the opposition, which is what happens when you make a mess of things and go into government without a plan. Instead, we have the revival of – in the words of the Department for Work and Pensions – the ' landmark Pensions Commission ', with supportive quotes from 11 (count 'em) organisations, including business groups, unions and charities. Talk about overkill. The statutory review of the state pension age (currently 66) is also being brought forward from 2029. The latter will probably end up recommending that the retirement age be put up to 70 – there won't be any supportive quotes when that's announced – in the hope that enough of us pop our clogs before we ever get the chance to benefit from the triple lock. The latter is a cow so sacred that the mere mention of changing it to make it less ruinously expensive is enough to cast the offending minister into the deepest pit of political hell. If the state pension were to rise in line with inflation (protecting its value) or earnings (linking it more closely to tax revenues from the working population), but not both – and especially not the third part of the lock (2.5 per cent if the other two are lower) – then we might be able to claim it a bit earlier. But the government doesn't dare say that. Anyway, we have the commission. It is charged with finding a way to increase pension saving because, while auto-enrolment into workplace plans has boosted the number of employees contributing to them to 88 per cent, 45 per cent of working-age adults aren't saving anything at all. If we all saved a bit more, then perhaps we could retire before we're knocking on heaven's door without having to worry too much about the arrival of the state pension. Why the discrepancy between those two numbers? Self-employed people and the growth of the gig economy. Surprise: pensions are not the first concern of young people grappling with sky-high housing costs while in insecure employment. Perhaps it's time to bite the bullet and focus on people who can afford to save a little bit more? Just a thought. One thing that might help: simplification. The private pensions market is still a lot more complicated than it ought to be. We're still a long way from the US, with its 401(k) schemes that everyone moons over. Make pensions easier, and people might save more rather than retreating in confusion when they start thinking about the issue in their forties because it's all so damnably complicated. Just a thought. Will Baroness Jeannie Drake (a member of the first commission), Sir Ian Cheshire and Professor Nick Pearce see that? Offer some meaningful solutions that a poorly led government, which keeps tripping over its own feet, might feel able to accept? I have my doubts. The commission's members are worthy, well-meaning and clever. I have no doubt that their hearts are in the right place. But they are part of the class that does not live in the difficult world where the rest of us reside – with its uncomfortable truths and trade-offs, and its tough challenges, the biggest of which is just getting through another workday with one's job intact and food on the table. I suspect that the government would like to put the burden of improving the situation on employers, so as not to upset the voters. That would be a dangerous road to go down. They've already had to swallow an increase in taxes on jobs in the middle of a sickly economy, and unemployment is now rising as a result. Adding to their burden will simply put jobs at risk. The government also faces some uncomfortable trade-offs. It just likes to ignore them in a way that the rest of us can't. But pigeons have a habit of coming home to roost. Perhaps the commission can work the oracle when it comes to the slow-burn pensions crisis that's been simmering for the last 20 years – longer, if we're honest. Someone is ultimately going to have to pay for better pensions, and that's where we come in. There's no real way to sugar-coat it. This will be a burden on our finances – one that might well end up feeling like another tax. Sometimes the truth hurts. But it has to be faced – sooner or later.
