Furious Debate Erupts Over the Future of the Triple Lock as Pension Costs Soar

The fight over whether to end the “triple lock” on pensions has turned into one of the biggest political battles in the UK. The controversy flared up again after Chancellor Rachel Reeves backed a review into raising the state pension age, saying it’s “right” to take another look at the policy.

The triple lock, introduced in 2011, guarantees that the state pension rises each year by whichever is highest — inflation, wage growth, or 2.5%. It was meant to protect retirees’ income, but the Office for Budget Responsibility says the policy has cost around three times more than expected, partly because more people are living past the pension age and overall spending has surged.

The Institute for Fiscal Studies estimates the triple lock could cost as much as £40 billion a year by 2050. Tom Selby, director of public policy at AJ Bell, says it’s not a matter of if the triple lock will be scrapped but when. Speaking to the Express, he said the government’s first step should be to decide exactly how much the state pension should be worth — and then link it to whichever is higher, earnings or inflation, instead of including the 2.5% guarantee.

“Deciding when to end the triple lock has become one of the thorniest questions in politics,” Selby said. “Once you reach that point, it would make sense to ditch the 2.5% underpin and simply link the state pension to the highest of earnings or inflation.”

After the government’s humiliating U-turn on winter fuel payments, Selby said he’d be “surprised” if they tackled the triple lock before the next general election.

That U-turn came after heavy backlash over a decision to cut millions of pensioners out of the annual payment, worth up to £300. In an attempt to plug a £22 billion gap in the public finances, the payment was limited to state pensioners on means-tested benefits like Pension Credit.

Selby explained that the impact of scrapping the triple lock depends entirely on the economy. “If one or the other is above 2.5%, you miss out on nothing, but if both are below 2.5% you don’t get that baked in real terms increase,” he said.

Jon Greer, head of retirement policy at Quilter, told the Express that if the government decides to axe the triple lock, they need to be upfront about it. “We would need a review on state pension vs median average salary and then agree the right level for state pension,” he said. “The Government would have to be clear in the communication as historically communication hasn’t been great.”

Greer also warned that the UK’s ageing population means pension costs will skyrocket in the decades ahead. By 2050, there will be 25% more people receiving pensions, putting even more pressure on public spending.

For now, the triple lock survives — but the growing political and financial strain means its days could be numbered. The big question is whether anyone in government is willing to make that call before voters head to the polls.