Scrapping pensions triple lock could lead to NHS ‘efficiency gains’, IMF says

Scrapping the pensions triple lock could lead to "efficiency gains" for the NHS, the International Monetary Fund (IMF) has said.

In its 2018 assessment of the UK, published yesterday, 17 September, the organisation said that scrapping the pensions promise could also lead to a number of “important savings” for the UK.

Public sector spending on health care and pension benefits will increase by 4 per cent of GDP between 2023 and 2043, according to the Office of Budget Responsibility.

The IMF said: “Opportunities for further efficiency gains in the NHS should be explored, and the elimination of the “triple lock” could lead to important savings overtime on pensions.

“While the government should continue to seek the best value for money in public spending, after several years of primarily expenditure-based consolidation identifying further efficiency gains could become difficult.”

The IMF also warned that revenue measures will have to focus more on "deficit reduction" unless a “fundamental rethink of the size and the role of the public sector” occurs.

The current triple lock policy sees state pension increase each year in line with whichever is highest out of average earnings growth, the consumer price index or 2.5 per cent.

In last year’s Autumn Budget the government confirmed that state pension would increase by 3 per cent, the first time since the introduction of the policy.

In March, a Pensions Policy Institute (PPI) report said scrapping the triple lock could result in around 700,000 more pensioners living in poverty by 2050, with the PPI also warning that it could wipe 5 per cent off the retirement income of a low-earning millennial.

Pension cuts have been an ongoing target for the proposed increase in NHS funding, with the Daily Mail reporting last month that Chancellor Philip Hammond is looking to cut pensions tax relief for thousands of the highest earners.

Furthermore, a report by the Resolution Foundation proposed a £2.3bn ‘NHS levy’ via National Insurance on earnings of those above the state pension age.

Hammond has yet to confirm a date for this year's Autumn Budget, expected in November, as the industry anticipates if pensions will be in the firing line following an expected NHS budget increase.

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