The Department for Work and Pensions (DWP) has been urged to abolish the long-standing state pension triple lock, with critics arguing it disproportionately benefits well-off households and is too expensive.
Jon Moynihan, writing in the Telegraph, stated: "Only by abolishing the triple lock can we reverse Britain’s decline." The triple lock ensures the state pension increases by the highest of average wage growth, inflation (CPI), or 2.5 percent. Moynihan questioned the fairness of the policy, noting that while it seems fair to choose the highest index, it ignores economic realities like regression to the mean.
The Intergenerational Foundation has also called for reform. Conor Nakkan, an analyst from the foundation, said: "The triple lock may have been introduced with good intentions but it has become an expensive and poorly targeted policy. It now delivers large increases to all pensioners, including millions who are already well-off, while younger generations face stagnant living standards, high housing costs and a growing tax burden."
According to the Institute for Fiscal Studies (IFS), the triple lock is forecast to be £10 billion more expensive per year than originally projected. The foundation proposes an alternative approach: tying state pension increases solely to inflation until 2030-31, then switching to a formula based on the average of inflation and wage growth. This middle-ground method would maintain the link between pensions and living costs while curbing unpredictable surges seen under the current arrangement.
In the 13 years since the triple lock was introduced, wages have been the highest index four times, inflation six times, and the 2.5 percent floor three times, highlighting the volatility of the policy.
