Triple lock expected to stay if Labour wins election
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The Labour party will keep the triple lock on state pensions if it wins the next general election, the i newspaper reported on Monday. Commentators have called for an independent review of the policy.
The date for election is yet to be announced but must be held no later than 28 January 2025.
The triple lock was introduced under the coalition government and means state pensions rise by the highest of inflation, earnings or 2.5%. Legally, the government is only obliged to raise the state pension in line with earnings. This April, it will go up by 8.5%, based on earnings figures from last autumn.
Many in the pensions sector consider the triple lock fiscally unsustainable, but politicians have regularly pledged to maintain a policy which benefits the age group most likely to go to the polling stations.
Many in the pensions sector consider the triple lock fiscally unsustainable, but politicians have regularly pledged to maintain a policy which benefits the age group most likely to go to the polling stations.
Tom Selby, director of public policy at investment platform AJ Bell, said it was unsurprising Labour has decided to do the same, but warned that the government will need to come clean with voters about the state pension soon.
"An independent review with cross-party support feels like the only way to break the hold the triple lock has on discussion about the future of the state pension,” Selby argued.
He described the mechanism as “volatile”, making the cost to taxpayers each year “both significant and unpredictable”. This means that “there is a risk planned rises in the state pension age will need to be accelerated to balance the books, embedding intergenerational unfairness into the system”, he said.
Selby suggested using the alternative proposed by the Institute for Fiscal Studies, whereby government would set out what the state pension should be worth in relation to median earnings, as a “more coherent” approach.
“Once you have set a clear goal for the value of the state pension, you can plot steady increases to reach that value,” he said. “Similarly, building greater certainty into future state pension age increases would help give savers confidence that the goalposts won’t be moved.”
Would an independent review loosen the grip the triple lock has on politics?
