Treasury proposing reforms to state pension in Tynwald

"This issue can no longer be ignored" says minister

The Isle of Man Treasury is proposing potential reforms to the state pension to address long-term sustainability issues within the social security scheme.

Treasury Minister Alex Allinson is calling for a "national conversation" on how to preserve the Manx National Insurance Fund - with four options being considered.

He acknowledges the choices are tough:

One proposal involves scrapping the 'triple lock' system which ensures the pension increases annually by the highest of 2.5 percent, earnings growth, or inflation.

Alternatives include linking pensions solely to inflation or adding a percentage increase on top of inflation, with options ranging from one to two percent.

The Social Security Scheme spent £267 million on National Insurance benefits and pensions during the 2024/25 financial year with most of this funded by NI contributions.

However the National Insurance fund, once projected to reach over £2.5 billion in 2007, now stands at under £1.2 billion.

Ramsey MHK Lawrie Hooper is proposing an amendment to require Treasury to maintain the fund at a minimum of twice its annual expenditure.

The proposals mark the start of what is expected to be a critical debate on the Island’s future approach to pensions and benefits.

You can listen to coverage of the debate in Tynwald via Manx Radio's AM 1368 frequency or by clicking HERE.