Lawmakers think UK may suspend wage-pension link to uplift economy; government denies

As the UK reopened its economy post coronavirus lockdown, the county is struggling to lift up its economy that has suffered huge losses due to the lockdown.

In order to bring the economy back on track, the government might have to make some cuts. Although there hasn't been an official word from the British government yet, local media has reported thatthe government might have to temporarily break the link between wage growth and annual increases in old-age pensions, a senior legislator said on Friday.

Following the 'triple lock' system, set up in 2010,Britain's state pension has seen a rise by whichever is higher of consumer price inflation, average earnings growth or 2.5 per cent.

However, this time that might not be the case, which is in direct contrast to the expected sharp increase in wage growth next year, after the end of job retention scheme started by the UK government this year to help people during the pandemic.

"A way forward might be to temporarily suspend the wages element of the lock," Mel Stride, chair of parliament's Treasury Committee, said. "This might not entirely conform to the Conservative Party manifesto, but I think most people would recognise that a potential double-digit percentage increase is unrealistic."

However, the government has, till now, denied any such possibility.

(With inputs from Reuters)