{"id":35761,"date":"2025-07-03T16:39:32","date_gmt":"2025-07-03T16:39:32","guid":{"rendered":"https:\/\/www.europesays.com\/us\/35761\/"},"modified":"2025-07-03T16:39:32","modified_gmt":"2025-07-03T16:39:32","slug":"scrap-triple-lock-pension-to-avoid-raising-retirement-age-to-74-ifs-warns","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/35761\/","title":{"rendered":"Scrap triple lock pension to avoid raising retirement age to 74, IFS warns"},"content":{"rendered":"

\n\t\t\t\t\tA report found the triple lock on the state pension could cost up to \u00a340bn by 2050\t\t\t\t\t <\/p>\n

The state pension age<\/a> may have to be increased to 74 if the triple lock is sustained, a leading think tank has warned.<\/p>\n

The Institute for Fiscal Studies (IFS) said in a report that an ageing population will mean the country cannot meet its growing state pension bill, with the lock set to cost an extra \u00a340bn by 2050.<\/p>\n

It said that a \u201csubstantial\u201d increase in the age people can start claiming their state pension will be required to maintain the pledge, which sees people\u2019s state pensions rise by the highest of inflation, average earnings growth, or 2.5 per cent each year.<\/p>\n

Without changes to the state pension age<\/a>, which is currently 66 but is rising to 67 between 2026 and 2028, the IFS is concerned that the triple lock will cost taxpayers billions more and become unsustainable.<\/p>\n

But it says that if the state pension age is increased significantly, it risks hitting poorer households \u2013 who rely on the payment for much of their retirement income \u2013 because they may have to work for longer.<\/p>\n

The report said: \u201cIncreases in the state pension age required to keep spending on the state pension below a certain level of national income would have to be substantial.<\/p>\n

\u201c[Official] modelling shows that to keep public spending on the state pension below 6 per cent of nation income while retaining the triple lock<\/a>, the state pension age would have to rise to 69 by 2049 and 74 by 2069.\u201d<\/p>\n

In April, the state pension went up by 4.1 per cent, making it worth \u00a3230.25 a week for the full, new flat-rate state pension and \u00a3176.45 a week for the full, old basic state pension. A rise of \u00a3472 a year and \u00a3363 a year respectively.<\/p>\n

Chancellor Rachel Reeves<\/a> has pledged to keep the triple lock until 2029, but the IFS said a double lock that instead linked increase in payments to wages or inflation was more sustainable.<\/p>\n

Speaking to The i Paper earlier this year, Jonathan Cribb, associate director of the IFS and head of retirement, savings and ageing, was unconvinced this would solve the problem though.<\/p>\n

He said: \u201cA double-lock is not much better than a triple lock in terms of predictability.\u201d<\/p>\n

According to IFS estimations, the protection adds \u00a311bn a year to government spending.<\/p>\n

Cribb added: \u201cIf the economy does really well over the next 15 years, then the triple lock will do nothing.<\/p>\n

\u201cAnd if the economy does really badly, it will cost a load of money. I think that\u2019s difficult for public finances.\u201d<\/p>\n

Official projections by the Office for Budget Responsibility (OBR) show that spending on the state pension is set to rise by 5 per cent of GDP today, or \u00a3150bn, to 8 per cent by 2070, equivalent to \u00a3240bn.<\/p>\n

The report also referenced a previous government review of the state pension age by Baroness Neville-Rolfe, which said it would have to rise significantly to prevent costs from rising dramatically.<\/p>\n

Under the current triple lock policy of at least a 2.5 per cent increase, the IFS estimated that state pension payments will rise from \u00a3230 a week to \u00a3250 by 2043 in today\u2019s money.<\/p>\n

This would raise the level of the state pension to 33 per cent of average earnings from just over 30 per cent today but add \u00a315bn to annual public spending by 2050 compared with lifting it in line with wage growth.<\/p>\n

Last week, Paul Johnson, director of the IFS, called for the triple lock to be scrapped \u201cas soon as possible\u201d as Labour faces pressure over the \u00a322bn fiscal gap left behind by the Tories.<\/p>\n

He said it \u201ccan\u2019t go on forever\u201d and said that once the state pension reaches 33 per cent of average earnings under the triple lock, it should be removed.<\/p>\n

The IFS also said employers should be forced to pump more money into the private pensions of their employees, calling on bosses to put at least 3 per cent of revenues towards a private retirement fund, with both employees and employers gradually contributing more as their earnings rise.<\/p>\n

It said by doing this, financial security in retirement would improve and boost nationwide pension savings by \u00a311bn.<\/p>\n

Johnson said: \u201cThere is a risk that policymakers have been complacent when it comes to pensions.<\/p>\n

\u201cWithout decisive action, too many of today\u2019s working-age population face lower living standards and greater financial insecurity through their retirement.\u201d<\/p>\n

A Government spokesperson said: \u201cWe\u2019re reforming the pensions market to drive economic\u00a0growth, ensure greater security in retirement\u00a0and put more money in people\u2019s pockets.<\/p>\n

\u201cOur pension schemes bill will make pension pots work harder for savers, and our forthcoming pension review will explore how we can take this even further to give hardworking people the retirement they deserve. And thanks to our commitment to the triple lock, millions will see their state pension rise by \u00a31,900.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A report found the triple lock on the state pension could cost up to \u00a340bn by 2050 The…\n","protected":false},"author":3,"featured_media":35762,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,8707,255,700,28258,67,132,68],"class_list":{"0":"post-35761","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-pensions","10":"tag-personal-finance","11":"tag-retirement","12":"tag-state-pension","13":"tag-united-states","14":"tag-unitedstates","15":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114790292900110948","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/35761","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=35761"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/35761\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/35762"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=35761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=35761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=35761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}