Sunak says he will look at quirk of potential pensions leap

FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak reacts as he leaves Downing Street, in London, Britain July 8, 2020. REUTERS/Hannah Mckay/File Photo

LONDON (Reuters) - British finance minister Rishi Sunak said on Wednesday he would consider “the anomaly” of potentially huge increases in pensions because of calculation distortions caused by the coronavirus crisis.

Prime Minister Boris Johnson promised not to break the so-called “triple lock” for pensions before he won a national election last year.

Since June 2010, Britain’s state pension has risen by whichever is highest of consumer price inflation, average earnings growth or 2.5%.

Sunak told lawmakers on parliament’s Treasury Committee they had heard evidence from other speakers pointing out “the anomaly” in how the system might work over the next few years.

“I think your committee is very abreast of the particular mechanical issues which that causes and are appropriate for people to raise and appropriate for us to look at, at the right time,” he said.

Average earnings are likely to grow very strongly next year compared with 2020 because around one in three private sector employees have been furloughed under the government’s coronavirus job retention scheme, which pays most workers 80% of their salary.

Torsten Bell, chief executive of the Resolution Foundation think tank, told the Treasury Committee last month that average earnings in Britain might bounce back by 18% next year, which represented an unrealistic increase for pensioners.

Johnson’s spokesman said in June the government had no plans to break the triple lock after media reports that Sunak was considering the option.

(The story refiles to fix duplicate word, no change to story.)

Reporting by William Schomberg; editing by David Milliken