The Isle of Man government has announced plans to scrap the “Triple Lock” system for state pensions. The current system guarantees that pensions rise by the highest of inflation, wage growth, or 2.5 percent. The government cited concerns about the affordability of the Triple Lock.
They plan to introduce a new guarantee that will link pension increases to inflation or a minimum two percent rise, whichever is higher. Alex Allinson, the island’s treasury minister, emphasized the need to preserve the National Insurance Fund for future generations. He stated, “Driving this change is the need to preserve the National Insurance Fund for our community into the future.
Isle of Man pension changes
It’s about intergenerational fairness and accommodating the needs of today’s children and grandchildren.”
Allinson also mentioned that parliamentarians agreed it would be unfair to force workers and businesses to pay increased contributions to the fund. At the same time, they deemed it crucial for pensioners’ income to reflect the cost of living on the island.
The Treasury has proposed that the fund should never fall below twice the annual expenditure level. This is to ensure long-term stability. The proposed reforms aim to keep the fund “sustainable and sufficient” to meet future benefits and pension demands.
The Isle of Man’s parliament, Tynwald, will vote on these reforms during the February budget-setting process. The Crown dependency has 35 parliamentarians who are scheduled to vote on the measure next month.
