State pension triple lock may not survive a year | Personal Finance | Finance


The state pension triple lock ensures the sum rises each year, by whichever is the highest of 2.5 percent, inflation or average earnings. After being temporarily paused due to warped earnings data, the triple lock will return this year in welcome news for pensioners.

However, not everyone supports the idea of the long-standing policy for older Britons in its current form.

Angus Hanton, of the Intergenerational Foundation, told The Telegraph: “It seems wrong that the state pension goes to older, wealthier people.

“This generation is made up of ex-private sector workers who have enjoyed generous defined benefit pensions, and ex-civil servant who have enjoyed much more lavish pensions than expected.

“It is deeply unfair that younger, working people are expected to fund this older generation’s state pension on top of that.”

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“Even if raising it as they did this year by 10 percent turns out to be an outlier, the cost to the Exchequer is still large. 

“And how they’d continue to pay for that if the inflation rates were still high could be a challenge.”

Indeed, the cost factor of the triple lock has frequently been raised as a major issue to tackle in the future.

While Megan Jenkins, partner at Saltus, welcomed the return of the triple lock from April, she questioned its longevity given financial concerns. 

She added: “The last couple of years, particularly the last couple of months, have taught us that things can change quickly, and nothing is guaranteed. 

“Fulfilling the triple lock on state pensions will come at a significant fiscal cost.

“With inflation predicted to be above seven percent next year, it begs the question as to whether the same could be committed to next year.”

Recently, the Adam Smith Institute has suggested a vastly different, controversial approach to the state pension.

The report’s authors described the triple lock as “inflexible by design”, as well as “unfit for purpose”.

They proposed a smoothed earnings link replace the current mechanism, and also suggested means-testing for the state pension be introduced.

A DWP spokesperson previously told “The UK state pension continues to provide the foundation for retirement planning and financial security in older age, with the full yearly amount of the basic state pension now over £2,300 higher than in 2010.

“Alongside this, Automatic Enrolment has succeeded in transforming private pension saving, with latest figures showing more than 10.7 million workers have been enrolled into a workplace pension to date and an additional £33billion, in real terms, saved in 2021 compared to 2012.”


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