Rishi Sunak suggests he could SCRAP pensions 'triple lock' over fears increase could cost taxpayers an extra £3billion amid the Covid recovery

Chancellor said concerns about the Government policy are are 'legitimate'
Lock guarantees state pension increase of at least 2.5 per cent
But inflation this year is more than 8 per cent, spark fears of larger increase

By David Wilcock, Whitehall Correspondent For Mailonline

Published: 10:37 BST, 8 July 2021 | Updated: 10:37 BST, 8 July 2021

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Rishi Sunak today suggested that the 'triple lock' on pensions may have to be broken this year to avoid a £3billion hit to Covid-battered public finances.

The Chancellor said concerns about the Government policy are are 'completely legitimate' amid concerns state pensions may rise by 8 per cent because of the pandemic.

He sand that any decision will be fair for 'pensioners and for taxpayers' after the Office for Budget Responsibility (OBR) predicted the increase from April.

Mr Sunak declined to rule out an alteration to the Conservative manifesto pledge to maintain the triple lock on pensions, instead only noting that it is policy at the moment.

It guarantees that the state pension increases by the highest out of inflation, average earnings or 2.5 per cent.

But he told the BBC the lock could be 'redefined', perhaps hinting at a way it could be sidestepped without breaking the policy.

The Chancellor said concerns about the Government policy are are 'completely legitimate' amid concerns state pensions may rise by 8 per cent because of the pandemic.

The triple lock guarantees that the state pension increases by the highest out of inflation, average earnings or 2.5 per cent.

'The triple lock is the Government's policy but I very much recognise people's concerns,' he told BBC Breakfast.

'I think they are completely legitimate and fair concerns to raise.

'We want to make sure the decisions we make and the systems we have are fair, both for pensioners and for taxpayers.'

Mr Sunak said the Government must 'wait for the actual numbers to be finalised', which he said are currently 'speculation', before looking at the policy 'properly at the appropriate time'.

But unusually strong recent rises in earnings as a result of the pandemic mean the payout is expected to sharply increase.

Average weekly wages rose by 8.4 per cent in the 12 months to April, according to figures from the Office for National Statistics.

This is as a result of artificially high earnings growth when comparing with a year ago when wages were depressed while many workers were furloughed.

Many jobs lost have also been lower-paid roles.