A 15-year-old rule for state pensioners should be axed, personal finance experts and thinktanks are warning.
12:26, 18 May 2026Updated 14:43, 18 May 2026
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The Department for Work and Pensions has been urged to contemplate scrapping a long-standing rule for state pensioners. A 15-year-old rule for state pensioners should be axed, personal finance experts and thinktanks are warning.
Raising the state pension by inflation – instead of the Triple Lock – could save £19 billion a year by 2035, according to research by a think tank. Since 2011 the state pension has risen by the highest of three measures – inflation, wage growth, or 2.5 per cent.
Pensioners are £1,300 a year better off than they would have been if the state pension had risen only in line with inflation over the past decade.
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Critics say that it has become unaffordable and is forecast to be £10bn more expensive a year than forecast, based on Institute of Fiscal Studies (IFS) figures.
The Intergenerational Foundation is calling for the state pension to increase with inflation until 2030-31 then by the average of inflation and wage growth.
It calculates that this would save £19bn a year by 2035, £28.5bn a year by 2040 and £38bn a year by 2045.
These savings should be directed to poorer pensioners through a new low-income pension supplement worth £30 a week (£1,560 a year), says the foundation.
Conor Nakkan from the foundation said: “The triple lock may have been introduced with good intentions but it has become an expensive and poorly targeted policy.
“It now delivers large increases to all pensioners, including millions who are already well-off, while younger generations face stagnant living standards, high housing costs and a growing tax burden.”
The Tony Blair Institute, another think tank, has estimated that it could rise as high as 7.8 per cent of GDP by 2070 if the triple lock remains.
The IF concludes that action is now urgent, warning that sticking with the current system risks “leaving younger and future taxpayers shouldering an increasingly heavy burden”.