LONDON (Reuters) - Britain must scrap its system of guaranteed annual pension increases for retired citizens, a committee of lawmakers said on Sunday, calling the rules “inherently unsustainable” and unfair on younger generations.
Since June 2010, Britain’s state pension has risen by whichever is higher of Consumer Price Index inflation, average earnings growth or 2.5 percent - a so-called ‘triple-lock’ designed to court elderly Britons who typically vote in large numbers at general elections.
A report by parliament’s Work and Pensions Committee said the triple lock had succeeded in raising pensioner incomes but needed to be scrapped and replaced with a fairer system after the next election due in 2020.
“The triple lock is inherently unsustainable,” the report said. “In the absence of reform, the state pension would inevitably grow at a faster rate than the rewards of work and would account for an ever-greater share of national income.”
The committee’s report on ‘Intergenerational Unfairness’ said the economy had become skewed towards ‘baby boomers’ - those born between 1946 and 1965 - and against ‘millennials’, born between 1980 and 2000.
“Millennials face being the first generation to be poorer than their forebears,” said lawmaker Frank Field, chair of the committee. “At the same time as tightening their belts, they are being asked to support a group that has fared relatively well in recent years.”
Reporting by William James; Editing by Ros Russell