New Prime Minister Andy Burnham has confirmed his commitment to keeping the triple lock, potentially leaving millions of state pensioners born before 1960 almost £1,900 better off. The policy is expected to remain in place until the end of the current Parliament, scheduled to last until 2029.
Triple Lock Increases Projected
Under the triple lock, the full state pension could rise by nearly £1,900 over the next three years if increases match last year's rate of 4.8%. Calculations show the full state pension climbing to £14,442 by 2029/30, which is £1,895 more than the current figure of £12,547. Everyone who has retired since 2016 receives this version of the pension.
The triple lock guarantees an annual increase in line with whichever is highest out of inflation, wage growth, or 2.5%. Last year, wages were highest at 4.8%.
Calls to Scrap the Triple Lock
The commitment comes amid growing calls to scrap the triple lock due to its cost to the nation. A sudden spike in inflation can send the pension rising, and the rate never comes down. Antonia Medlicott, managing director of Investing Insiders, said: "The problems come after the triple lock causes a large increase. For example, if there’s a spike in inflation one year, the lock causes the state pension to rise by that amount - but this rise is then locked in place. Every time a large increase like this happens, the state pension permanently increases alongside it, with the extra associated costs never going back down."
According to the Office for Budget Responsibility, rises caused by the triple lock have already cost around £12 billion a year more than if the state pension had risen in line with wages since 2011. Medlicott added: "But this then raises the question: what’s the alternative?"
Long-Term Impact
An expert at Predictionist said: "The important point is that small annual increases become much bigger over time. A 4.8% rise may not sound dramatic in one year, but if it were repeated for a decade it would push the full new state pension above £20,000 a year."
