Plans to scrap 'triple-lock' state pension uplift

Plans for the "triple lock" uplift to state pensions on the Isle of Man to be scrapped in a bid to preserve the National Insurance Fund have been outlined.

The £1.09bn fund is topped up annually with money left over after contributions from workers have been used to pay for the majority of benefits and state pensions.

But a report released in October forecast the fund would be exhausted by 2047-48, partly due to people claiming state pensions for longer, if the system remained.

The change, which would affect those who reached state pension age after 5 April 2019, would see pensions rise by 2% or inflation each year, whichever figure was higher.

The proposed change will be part of the Isle of Man Budget measures to be put forward for approval in February.

The new Manx Pension Guarantee would see payments to those who reached pension after the 2019 date rise by 2.2%, reflecting the most recent Manx inflation rate, and grow from £12,558 to £12,831 for the 2025-26 year.

Pensioners born before that date would see a 4.1% increase, with payments uplifted from £8,814 to £9,175 across the same period before the Manx Pension Supplement is added for those eligible.

Currently increases under the "triple lock" principle are based on a formula adopted in the UK that increases pensions annually by the highest of three options, namely 2.5%, CPI inflation, or average wages increases.

The Treasury said the change, which would not affect the majority of pensioners, would ensure the fund was "sustainable and sufficient" to cover future benefits and pensions demands.

The department has also proposed it should never fall to less than twice the annual expenditure.

Treasury Minister Alex Allinson said the revised scheme was "about intergenerational fairness, and accommodating the needs of today's children and grandchildren".

He said the changes would allow pensioners would benefit from "the certainty of knowing that their income will rise each year to match changes in the cost of living".

They would also mean the fund would "remain in a healthy and sustainable condition" and "able to provide both for their pensions and for those who retire in the future", he added.

If approved by Tynwald during the budget-setting process next month, the changes will come into effect in April.

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