Former Halifax boss claims UK 'may not need universal state pension in future’ and that the triple lock 'has to go'
A former boss for Halifax has told LBC that UK "may not need a universal state pension" and that the triple lock on pensions "has to go".
Listen to this article
Sir Howard Davies, former chairman of the NatWest Group, historian, author of The Chancellor's Steering the British Economy in Crisis Times, was quizzed by Tom Swarbrick on the state of the economy on Wednesday night.
He was quizzed on whether the UK can afford to have a universal state pension when the country is "demographically top-heavy".
Mr Davies responded saying: "on average, people have been investing far smaller proportion of their income than they need to do if they want to maintain a respectable income in retirement.
He added he suspects that the UK will need a basic state pension for the foreseeable future.
Tom interjected asking: "But not universal?"
Mr David replied: "Well, perhaps not universal.
He explained: "The difficulty with it not being universal is the point about the contributory principle. You know, our system has been built on the idea that you do get out if you put in, and so people like me are better off, obviously, but I have actually paid a lot of tax and a lot of National Insurance, and therefore maybe it's a little bit tough to say I get nothing back when I retire.
He went on: "So I think not having any basic state pension is something that I do not expect to see. But I think what you have to do is to make sure that it isn't excessively generous to the people who don't desperately need it."
He added he's "amazed" whenever he gets his little statement and sees how much it's gone up because of the triple lock.
Read more: Woman, 70, charged with murder of British expat found stabbed outside French guesthouse
Read more: 'A slap in the face': PC Andrew Harper’s killers could walk free early under prison release scheme
He told Tom that the triple lock "simply has to go”.
"I do not think it is affordable. It is costing a lot more than people expected when it was put in place, because, you know, they— it's a heads you win, tails they lose argument.
"As you know, that's essentially what the triple lock implies, and the assumptions that were made when it was put in place were that it would cost X.
"Now, I can't remember the precise numbers, but it's costing £7 or £8 billion more than the assumption when it was put in place,” he added.
He said better off pensioners, are "benefiting considerably" from that.
He added: “It's a very disappointing feature of our politics that privately everybody you talk to, all parties say, we know that's unaffordable in the long run, and yet whenever they're asked by someone like you, they say we'll keep it."