Calls are growing for the government to scrap the state pension triple lock, with experts warning it is unsustainable. The triple lock ensures the state pension increases each year by the highest of inflation, wage growth, or 2.5%. As a result, the state pension has risen by thousands of pounds in recent years.
Report Calls for Change
A new report by the Resolution Foundation argues that the triple lock is no longer suitable. Experts note that pensioner earnings have surged to match those of the working-age general population. The report states: "The state pension triple lock has delivered real gains for pensioners since its introduction in 2012. But the case for boosting pensioner incomes over and above others has now run out."
Pensioner Income Levels
According to the report, pensioners have experienced three times the living standards growth of non-pensioners over the last two decades. A typical pensioner household now has the same income level as a typical working-age household, and pensioners are less likely to be in poverty than the rest of the population. The report concludes: "There is not a strong case for continuing to increase state support for pensioners faster than the wages of typical workers."
Financial Impact
The Office for Budget Responsibility (OBR) projects that state pension spending will rise by an additional £80 billion over the next 50 years, but warns it could be £40 billion higher or lower depending on economic conditions. The triple lock's volatility means the value of the state pension depends on earnings, inflation, and their fluctuations.
Industry Reaction
Lily Megson-Harvey, policy director at My Pension Expert, responded: "The Resolution Foundation is right to raise questions about the long-term sustainability of the triple lock, but for millions of pensioners this is about financial security. Many retirees are grappling with rising living costs and uncertainty about how long their savings need to last. Scrapping the triple lock without a clear alternative risks undermining confidence in retirement planning." She added: "People deserve confidence that the goalposts won't keep moving. The government must work with the industry to focus on long-term sustainability and fairness, ensuring retirees are protected."
The report adds to growing concerns about the affordability of the triple lock in future years, as the government faces pressure to address the issue.
