The state pension triple lock ensures the payment rises by the highest of inflation, 2.5 per cent or average earnings each year
In our weekly series, readers can email any question about their finances, to be answered by our expert, Rosie Hooper. Rosie is a chartered financial planner at Quilter Cheviot and has worked in financial services for 25 years. If you have a question for her, email us at money@inews.co.uk
Question: I’m 55 and plan to start taking my pension in around 12 years. But the uncertainty around the state pension/triple lock is creating a bit of uncertainty for my private saving. It’s hard to know whether the triple lock is staying and therefore how much the state pension will be. Should I be factoring in that it could be entirely ditched when doing my retirement planning? I worry that it could be means tested and therefore saving more might hit me negatively!
Answer: When it comes to retirement planning, it’s natural to seek certainty. But as your question rightly highlights, the future of the state pension triple lock is increasingly hard to predict and that introduces a layer of ambiguity for anyone trying to forecast their future income.
You’re 55, with around 12 years to go until you plan to retire. That would see you accessing your private pension at around 67, close to the current state pension age.
You mention that you’re saving into a defined contribution (DC) scheme, meaning the value of your pension will depend on the contributions made, investment performance, and ultimately how you choose to draw it down. That puts more pressure on you to make smart assumptions about future income sources, including the state pension.
The triple lock, which ensures the state pension rises by the highest of inflation, earnings growth, or 2.5 per cent, is undoubtedly generous. It’s why it has come under increasing scrutiny from fiscal watchdogs and economists, who warn of its long-term cost.
With the Office for Budget Responsibility now projecting that the triple lock could add as much as £15bn a year to public spending by 2030, questions about its sustainability are no longer hypothetical. Recent speculation has included potential moves towards a “double lock” or even some form of means testing.
But here’s the important distinction for financial planning: while these proposals are being talked about, there is currently no concrete policy to dismantle the triple lock, and both major parties remain publicly committed to retaining it for the time being.
So should you plan as if it will disappear? Not necessarily. What makes most sense is to treat the state pension as just one layer of your retirement income and to think of it as a foundation, not a guarantee. In your case, assuming 12 years of further contributions, you will probably build up a full or near-full entitlement.
As for your concern about means testing, any changes would be politically difficult and administratively complex. Prior to 2012 there was no state-backed expectation for people to build a large private pension and defined benefit pensions had started to be phased out.
By contrast, those who have built up private savings after 2012 due to auto-enrolment could potentially find themselves more exposed to any future means testing reforms as the government might say that there was some expectation at this point. So, while no such proposals are on the table today, any future policy would need to carefully navigate the differences in how different generations have been encouraged to save for retirement.
However, that doesn’t mean you should assume the rules won’t change. That’s why good planning builds in flexibility. For example, maintaining a clear view of your basic living costs in retirement and using the state pension to cover those, then layering other sources like your private pension or ISA savings on top for discretionary spending, is a helpful way to reduce your reliance on the state pension alone.
Your question also intersects with another important reform coming in 2027: the changes to how pensions are treated for inheritance tax. Under current rules, unused pension pots can usually be passed on free of inheritance tax, even if the individual dies after age 75 (with income tax applying to the beneficiary). But from April 2027, the Government has confirmed that pensions will no longer enjoy a blanket exemption from inheritance tax.
If left unused and passed on, the value of a pension pot will be included in the estate and may therefore be subject to inheritance tax, a major shift from the current position. This change could influence how people think about drawing down their pension during life versus preserving it to pass on.
Ultimately, no one can predict exactly what will happen to the state pension or triple lock. But by building a retirement plan that doesn’t rely on it entirely, you give yourself a buffer against political shifts. A financial adviser can help model different outcomes, factoring in inflation, tax changes, and market returns, so you’re prepared for a range of scenarios.
And remember, saving more rarely hurts you in the long run. Even if policies shift, having greater financial resilience will always put you in a stronger position and will give you more choices when the time comes to retire.