The pensions triple lock could be scrapped in the near future as the government looks to recoup the hundreds of billions of pounds it has spent on Covid-19 support.

According to a Treasury document dated May 5, seen by the Telegraph, chancellor Rishi Sunak has been advised to break one of the Conservatives’ manifesto pledges and scrap the pension triple lock on state pension rises. Under current rules, the state pension is increased by the triple lock which is the highest of earnings growth, price inflation or 2.5 per cent a year.

According to the Telegraph, the document forecast Britain will have a £337bn budget deficit this year, due to the amount of support offered by the government throughout the Covid-19 crisis. Mr Sunak has also been told he may have to backtrack on the Conservative’s promise to not raise taxes this year.

The document stated it would be “very difficult” to fill the gap in public spending without breaking the tax lock and suggested to raise the revenue needed the government would either have to hike income tax, VAT and national insurance or reform pensions tax relief. Other suggestions included public sector pay freezes, an NHS and social care tax surcharge or a new carbon/green tax.

According to Andrew Tully, technical director at Canada Life, scrapping the triple lock would be seen as unfair as pensioners would be a lot worse off in the future.

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