The charts that show why the UK can’t afford the state pension triple lock

The charts that show why the UK can’t afford the state pension triple lock



Posted by theipaper

15 comments

  1. An ageing population and a “vulnerable” economy are making reform of the [state pension triple lock](https://inews.co.uk/opinion/people-not-saving-enough-pensions-only-answer-3797119?ico=in-line_link) increasingly likely.

    Britain’s public finances are heading towards an “unsustainable” future, according to the Office for Budget Responsibility (OBR), with the official finance watchdog forecasting that government debt will more than triple in the coming decades.

    This stark warning underlines why [reforming the state pension triple lock](https://inews.co.uk/inews-lifestyle/money/pensions-and-retirement/scrap-triple-lock-pension-avoid-retirement-age-3782377?srsltid=AfmBOopKMf7OUPOyHBEAp3c2cgv-dypW9FdWJKjuK9Ov5aHUh-KD4o2i&ico=in-line_link) — a promise to [increase pensions](https://inews.co.uk/inews-lifestyle/money/pensions-and-retirement/retirees-living-abroad-inflation-frozen-pensions-3778795?ico=in-line_link) by whichever is highest out of inflation, wage growth, or 2.5 per cent — is now all but inevitable.

    In a new report, the OBR [highlighted that Britain is in a “vulnerable position” among advanced economies](https://inews.co.uk/news/politics/end-of-state-pension-triple-lock-in-sight-as-uk-faces-running-out-of-cash-3795054?ico=in-line_link#:~:text=The%20OBR%20said%20that%20on,cent%20by%20the%20early%202070s.), ranking sixth highest in government debt, fifth highest in deficit, and third highest in borrowing costs.

    The [triple lock](https://inews.co.uk/news/politics/state-pension-triple-lock-closer-to-being-axed-3598351?ico=in-line_link), initially introduced in 2011, is expected to [cost nearly three times more by 2030](https://inews.co.uk/inews-lifestyle/money/pensions-and-retirement/state-pension-triple-lock-scrapped-2030-3797983?ico=in-line_link) — rising to £15.5bn a year — as pension payments stretch over longer retirements.

    Here are the charts that highlight why the [triple lock](https://inews.co.uk/category/inews-lifestyle/money/pensions-and-retirement?srsltid=AfmBOor_inizNaoHtdcxpUrC8A2ldQvMaPLF4B-GE7ls5NcQb4wlNCLw&ico=in-line_link)‘s future is at risk.

    The odds of a newborn living to 100 have more than doubled for women in the last four decades, which could prove costly for governments of the future.

    In 1981, roughly 8.4 per cent of female babies were expected to celebrate their 100th birthday. Fast forward to 2024, and that figure jumps to about 18.2 per cent — more than twice as many.

    For men, the starting point is lower, but the leap is even steeper, climbing from 4.3 per cent to 11.7 per cent over the same period, nearly tripling the chance of making it to a century.

    These are not small changes. Increasingly, people are living longer past retirement, posing a significant challenge to the state pension system.

    The state pension, already under pressure from an ageing population, must now stretch to cover a growing number of people living well beyond 65, and paying out for longer.

  2. At the average uk wage, a person today will pay about £2k worth of NI a year. Assuming someone worked from they were 18 to they were 66, that’s 48 years, meaning they would pay £96,000.

    At a state pension of £12,000, a pensioner will get back everything they paid within 8 years- by the time they’re 74. Keep this in mind when 85 year old are banging on about “I paid in my whole life, it’s my money” etc etc.

    And I know it’s a lot more complicated than just using today’s numbers and ignoring inflation and interest, but it’s just to give an idea. NI was not set up with people regularly living in to their 90’s in mind (and neither was the NHS)

  3. does it show that money is not unlimited as some people seem to think ???

  4. Why is it always about taking away from people who have little? We still have some of the lowest pensions in Europe and private pensions are unlikely to perform as well as we were promised.

    How about scrapping the upper limit for NI contributions?

  5. I’m 68 retired.
    Whilst Triple Lock sounds jolly nice, I’ve always thought it wasn’t in step with reality, my thoughts on which one:

    – 2.5% fixed, excessive if inflation is low, inadequate of inflation is high
    – Wage inflation, I’m not competing in the wages market, I’ve left all that behind
    – CPI, this is more like it and in line with Benefits

  7. Yet we have the amongst the lowest state pensions in Europe

  10. This crap picking on the state pension is just something to cover up the real issues of government spending and tax collection.

    a) the state pension, even if reformed, will not reduce much if tracked by something like cpi

    b) A huge base rely on this money as previous generations were told by the government that the NI would cover the cost

    c) Successive political parties have kicked the spend and tax receipt can down the road. Eventually it will hit a wall, but not now… so that is good enough for the msm.

    d) a radical overhaul of tax and spending is needed. Include and not limited to; NHS (largest employer in the world, largest health spend for one of the worst services in Europe). maybe change to French model, in-work and out of work benefits, overly generous in some areas, and open to fraud on a massive scale rendering some communities on the fringes. Taxes. PAYE cannot be taxed anymore (the politicians will spout the broadest shoulders bollocks), introduce a wealth tax (hard to do properly).

    d) When over 50% of the working age population are net takers of tax rather than contributors, that society has a problem. The uk passed this mark a couple of years ago and the numbers are getting worse. If we dont want managed decline, we need to act.

    e) AI will render large sections of the population ineffective and fringe, use this as an opportunity to introduce universal payments, but not make it a lifestyle choice.

    it will take a brave government and population to face up to all of this and debate it like adults, rather than pick on one spending bit or another. For instance the current chancellor, just tried to stem some benefit spending a tiny bit, almost lost her job, the bill was neutered and will cost the government even more now.

  11. And governments don’t want to do anything, fucking boomers

  12. I can’t help thinking that this whole conversation is largely academic because within 5 years 80% of the population is going to be out of work because of AI. How do we even feed them with virtually no income tax coming in?

  13. The triple lock was introduced around 2010, yet it is treated like the fucking magna carta.

    Get rid of it!

  14. The state pension is dreadful at 230£ per week, nobody can live with that, it would have to increase 10 times or more

  15. Anybody with even a bit of economic/financial literacy understands the triple-lock is not long-term viable.

    It’s a toxic policy by Tories to get boomer voters

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