New Prime Minister Andy Burnham has committed to keeping the Triple Lock mechanism for the state pension, ensuring payments of £9,854 per year for pensioners over age 74 from next year. The move comes after Sir Keir Starmer's resignation as Labour Party leader, with Burnham confirmed as PM on Monday.
Triple Lock Guarantees Minimum 2.5% Rise
The Triple Lock guarantees rises of at least 2.5 per cent next April. For those on the basic state pension—typically women born before 1953 and men born before 1951, meaning they are aged over 74—the current £184 weekly payment will rise to approximately £189, equating to £9,854 annually. This commitment is set to remain in place for the remainder of this Parliament.
Burnham Defies Calls to Scrap Pledge
Mr Burnham is keeping the pledge despite a clamour to scrap it. Former Liberal Democrats pensions minister Steve Webb, who introduced the Triple Lock, defended the policy on the MoneyWeek Talks podcast. “I became pensions minister in 2010. But in the previous 30 years, the state pension had been falling in value relative to what people earn, so it just went up with inflation most of the time,” Webb said.
Webb: Triple Lock Repairs Decades of Damage
“But the problem with that is if you earn and earn and then stop earning, then the thing you fall onto when you stop earning needs to be connected to some proportion of what you were earning. Otherwise, you just fall off a cliff and your standard of living crashes. So, the state pension needs to be pegged to a proportion of what people are earning and for 30 years, [prior to the triple lock] that had not happened,” Webb explained. He added, “So, the point of more generous indexation post 2010 was to undo 30 years of damage. I’m not embarrassed or ashamed; I am proud of the fact that the state pension has been over-indexed.”
Impact on Pensioners
The Triple Lock ensures that the state pension rises by the highest of average earnings growth, inflation, or 2.5 per cent. For basic rate pensioners, the increase to £9,854 per year provides a vital income boost. The policy remains a cornerstone of Burnham's economic agenda, even as critics argue for reform to focus spending elsewhere.
