Why the state pension triple lock is closer to being axed than you think

18 comments

1. Turmoil in the Labour Party over cuts to benefits for the disabled and slashing the foreign aid budget to boost defence spending has prompted a crisis of confidence among its MPs.

   Concerned about the party’s ideological direction, Labour MPs are casting around for other sources of government savings, with some now eyeing the sacred cow of British politics – the pensions triple lock as ripe for reform.

   The triple lock guarantees that the state pension rises each year by the highest of the Consumer Prices Index measure of inflation, wage rises and a 2.5 per cent floor. The Government has committed to keeping it for the duration of this Parliament until the next general election which must be held by August 2029.

   Thinktanks and right-wing commentators have mooted suggested changes to the triple lock, such as linking it only to wage growth, but Labour MPs haven’t dared to question its future because of the political outrage any debate sparks.

   But now, despite only winning power eight months ago, some in the party are starting to privately question whether the policy would survive into a second term in office. MPs are reluctant to speak on the record, fearing a backlash from their constituents and party managers.

   “We have got to stick to it in this Parliament but if we are in financial difficulties at the end… then it has got to be in the mix,” one Labour MP told *The i Paper*. “I can’t see that it remains sacrosanct, it’s got to be looked at.”

   Another Labour MP proposed that, rather than cutting welfare for disabled people, the government should end the high state pension guarantee for wealthier pensioners.

   # ‘Propping up rich pensioners’

   “Why should disabled people bear the brunt of the cuts? They haven’t caused or contributed to any of the crises that we are in. And go back to first principles, the social security system should be there as a safety net for those who need it rather than propping up rich pensioners. If we are talking about making a tough choice that should be one of the choices we are making,” the MP said.

   When it was introduced in 2011, the triple lock was expected to cost around £50m a year. But unstable economic conditions including high inflation, and high earnings growth – not always at the same time – has caused the value of the state pension to skyrocket in recent years**,** rising by 10.1 per cent in 2023, and by 8.5 per cent in 2024.

   Roughly half of the UK’s current benefits bill is spent on the state pension, which cost £110.5bn between 2022 and 2023, and is expected to rise to £124bn from 2023 to 2024.

   With competing pressures for government spending, its critics say the lock is now unaffordable and more thought should be given to helping the very poorest pensioners, perhaps by means testing the benefit. Under such a change pension payments could be assessed based on an individual’s income or savings, reducing payments for wealthier retirees.

   Currently, the full new state pension is worth £221.20 per week (£11,502 per year), and under the triple-lock, this will rise by 4.1 per cent in April to £230.30 per week (£11,975 per year).

   # Politically toxic debate

   The issue’s political toxicity silences any politician who dares suggest change. In January, Conservative Party leader Kemi Badenoch triggered a row by appearing to suggest her party wants to explore greater means-testing of Government support, because the UK has a poor record in prioritising help to those who need it the most.

   Her comments, in response to a question about the state pension, led other parties to accuse her of wanting to water down the triple lock. The Liberal Democrats parked an advertising van outside Tory HQ depicting a sad-looking pensioner. A Tory spokesperson denied any change was on the cards and accused opponents of misrepresenting her as the backlash grew.

2. If someone could triple lock my wages, that would be brilliant.

3. This is the kind of thing where we need the politicians to sit down together and come up with a long-term plan. They should be trying to agree on an affordable system for the next 50 years, not arguing over the next five.

4. Good. the pain needs to be shared with the country’s richest demographic.

5. I have always said it should be tagged with wages. This would have a two-fold effect where older people are also infested in making sure that wage growth is a thing. Which would, in and of itself benefit GDP as stagnant wage growth results in a stagnant economy

6. Admittedly I’m not very good at maths, but doesn’t the Triple Lock *have* to be stopped at some point?

   If state pensions always go up by the highest check then the proportion of state spending that’s going on pensions will always increase. Currently, nearly an eighth of all government spending is pensions.

   Rather than this constant ‘triple lock+?’, ‘maybe stop it’, triple lock forever!’ debate we need to admit that it needs to stop *at some point*. Maybe this year, maybe in ten years, maybe a hundred years – but it, mathematically, cannot last forever.

   So it’s time to have a grown up conversation about what we do with pensions. Because right now for every Pound that is spent or earned in the UK 5p is taken out in taxes and given to a pensioner. Okay, we’re managing that. Maybe we can even manage 10p. But we can’t do 50p. We need to pick a ceiling – otherwise we’re going to have chaos when we reach it by surprise.

7. Great. Can’t wait to hear my in-laws moan about this too when they bring in more a month than me and my partner and have significantly less outgoings.

8. It’s unsustainable and simply means the young subsidise the elderly who already have more than most other demographics. It’s taking from the poor to give to the rich all in the name of political votes.

9. We need a proper honest conversation about pensions and their affordability as a benefit and who should get them. We just can not afford to keep paying them to everyone as the number of old people grows (until that number starts to decline). I saw a great suggestion about giving everyone born in the UK £10k at birth and going into a wealth fund and just growing and becoming their pension. So less than one years pension as it stands, but left for a lifetime. Yes clearly that’s a long term solution, but that’s what we need. I feel means testing is going to have to come in somewhere down the line (given that this is a benefit and not an allowance). But as decent pensions declined and now it’s basically your pot of money and if you don’t/ can’t invest, your buggered, the number of people in 20-30yrs with minimal personal pension is probably going to increase??? We need proper long term thinking and a hard look at what the purpose is

10. It needs to go, boomers always complain about paying in but right now they are receiving state pensions valued at 130% of what they contributed

11. Could it not be locked to public sector wage increases?

12. This thing needs to go. It is unaffordable.

13. If they had improved the world then yes, I would be happy making their lives better. But since they have destroyed everything and working people are now worse of than they are maybe they can pull themselves up by their bootstraps

14. Say bye bye to any generational wealth in the UK👋👋

    Bar the ruling class that is!!

    Corporations get richer whilst the people get poorer…

15. Scrap it and make it a contributions pension then or SIPP. Don’t contribute, get nothing. Only fair.

16. It should, means testing next. The country is bankrupting itself with universal benefits.

17. I’m retired and benefit from the triple lock. It is not right if it is left as it is when money is so tight. I believe it was a Tory initiative to woo oldies, like myself, to vote for them. Except I don’t.

18. Orcs don’t melt asbestos covered steel!!!! 🤓

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