My Lords, I declare an interest as a trustee of the parliamentary contributory pension scheme. Looking at the detail of the Guaranteed Minimum Pensions Increase Order 2021, one has to remember that it applies only to those who retired before 6 April 2016. I looked at what would have happened if I had retired on that date and at life expectancy data. It would mean that I got 29 years: that is not a small financial commitment for Her Majesty’s Government.
I want to talk about the triple lock. If one thinks about the challenge to the Treasury—in effect, the taxpayer—it is almost a triple whammy. There is the basic state pension, based on national insurance contributions; the additional state pension, which is partly earnings-related; and all final salary schemes for public sector workers. The financial cost in the past three years has gone up by 21%, which is over £1 trillion in real money. Has not the time come for the Government to review the employee’s contribution through national insurance, and for the public sector as well? This seems fair, not least because a pension—one that is pretty old—is a really good deal. Of course, the cost of that state pension is forecast—admittedly over 50 years—to rise from 4.9% of national income to 6.9%. We need a clear positioning paper, produced by the interested parties in the Government and the pension industry, to look at the financial options for the national pension and state employee pensions.
I offer one saving: the £10 Christmas bonus. This year, after the pandemic, the Chancellor can say, “Father Christmas has run out of money and there will be no Christmas bonus for this coming year.”
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