Boris Johnson’s pledge to UK pensioners could be at risk after Covid-19

Government officials are aware that the pensions “triple lock,” promised by the last three Conservative prime ministers, may have to be reviewed if it becomes unaffordable, a person familiar with the matter said.

One of Boris Johnson’s most politically sensitive election pledges could be at risk in the wake of the economic fallout of the coronavirus.

Boris Johnson, U.K. prime minister, center, speaks while Rishi Sunak, U.K. chancellor of the exchequer, left, and Jenny Harries, deputy chief medical officer, listen during a daily coronavirus briefing inside number 10 Downing Street in London, UK. (Bloomberg)

Government officials are aware that the pensions “triple lock,” promised by the last three Conservative prime ministers, may have to be reviewed if it becomes unaffordable, a person familiar with the matter said.

A Treasury official denied that any decision had been taken, and rejected suggestions that Chancellor of the Exchequer Rishi Sunak was preparing to drop the promise.

But the virus has left a question mark over the guarantee to raise the state pension every year by the annual growth in average earnings, inflation, or 2.5% -- whichever is highest.

That stems from the effect, first highlighted a week ago, that furloughing millions of workers and then returning them to work is expected to have on earnings. Some economists predict a drop this year followed by a rapid increase in 2021. That would mean the state pension, which already costs the government about 100 billion pounds ($126 billion) a year, having to rise substantially.

The Treasury said in a statement: “Announcements on tax and pension policy are for budgets. The government is committed to supporting pensioners.”