The future of the state pension Triple Lock is facing a serious challenge, as a leading think tank urges the government to replace it and use the savings to support younger generations.
Pressure on the Pension Promise
The Intergenerational Foundation (IF) has presented a set of three bold reforms to the UK's tax and pension system. These proposals aim to rebalance public finances and address what they see as a growing inequity between older and younger households.
Conor Nakkan, a researcher at the think tank, has publicly called on Labour Chancellor Rachel Reeves to use the upcoming Budget as a pivotal moment. He described it as "an opportunity to put the public finances on a more sustainable footing".
The Rising Cost of the Triple Lock
Mr Nakkan highlighted the state pension triple lock as a significant and escalating financial burden that falls on working-age people. This policy, introduced in 2011, guarantees the state pension increases annually by the highest of three measures: average earnings growth, inflation, or 2.5%.
"Older people benefited significantly from the introduction of the triple lock," Nakkan stated. However, he pointed to stark new figures from the Office for Budget Responsibility (OBR). The OBR's latest estimates suggest the policy will cost £15.5 billion a year by 2029–30. This is nearly three times the original forecast of £5.2 billion.
A Contrast with Youth Service Cuts
The argument for reform is bolstered by contrasting the rising pension costs with deep cuts to services for the young. The think tank revealed that between 2010 and 2020, real-terms spending on youth services by local authorities was slashed by more than 70%.
The consequences of these cuts have been severe. By 2023, approximately 1,200 youth centres had closed and over 4,500 youth workers lost their jobs. Research links these reductions to declining educational performance and rising youth offending rates.
Proposed Reforms and Government Response
The Intergenerational Foundation's key recommendation is for the government to temporarily replace the triple lock with inflation-based uprating for the next five years. Forthcoming research by the IF suggests this move could save around £8 billion per year by the early 2030s.
"Once public debt is on a sustainable downward path, an earnings link could be established to ensure the state pension continues to rise in line with living standards in the longer-term," Mr Nakkan added.
In response, a Government spokesperson reaffirmed its commitment, stating: "Our commitment to the triple lock is unwavering because we want pensioners to enjoy the dignity and respect they deserve in retirement. This means millions will see their State Pension rise by up to £1,900 over this parliament."
