Andy Burnham has confirmed there are no plans to abandon the state pension triple lock, despite mounting pressure over the policy's cost. The Greater Manchester Mayor acknowledged questions surrounding the mechanism but said it would be "dangerous" to go against the Labour manifesto.
Triple lock mechanism and cost
The triple lock guarantees the state pension rises every year in line with whichever is highest out of inflation, wage growth or 2.5%. This can, and frequently does, result in costly above-inflation increases.
Based on current projections, that appears set to be the case again in April 2027. The latest wage growth figures of 4.1% sit above inflation. The rise to the state pension earlier this year was also based on wages.
Projected increase and political pressure
The full state pension is on course to climb by over £500 next year. The triple lock is enormously expensive for the nation, as increases are secured annually, and even if the amount surges in one particular year, it would still be required to rise again the following year.
This essentially leaves any government held hostage to pension increases. Calls are growing ever louder for the triple lock to be scrapped, but any decision to do so would represent a bold political move.
Expert and OECD calls for reform
Leading economists maintain it will ultimately fall to a Prime Minister to make the defining decision. The Organisation for Economic Cooperation and Development (OECD) is amongst influential bodies to call for reform.
Mark Pemberthy, benefits consulting leader at Gallagher, said: "Andy Burnham has declared he has a plan, but we may need to wait a while before we know exactly what that means for pensions."
Angeline Ong, senior investments analyst at IG, said: "The OECD has added its voice to a growing chorus questioning the long-term sustainability of the triple lock, but politics remains the biggest obstacle to reform."
