The International Monetary Fund has urged Chancellor Rachel Reeves to consider ending the pensions triple lock and introducing charges for NHS treatment, warning that the UK government risks missing its fiscal targets. In its annual report on Britain's economy, the Washington-based organisation said Reeves should create more fiscal headroom before adopting new tax or spending measures.
The IMF acknowledged that budget rules introduced by Reeves last October had enhanced fiscal credibility, but cautioned that risks must be carefully managed. "In an uncertain global environment and with limited fiscal headroom, fiscal rules could easily be breached if growth disappoints or interest rate shocks materialise," the report stated.
To address rising costs from an ageing population, the IMF suggested replacing the triple lock with earnings-only indexation and introducing co-payments for higher-income NHS users. "The triple lock could be replaced with a policy of indexing the state pension to the cost of living," the report said, adding that access to public services could depend more on ability to pay.
Reeves responded by saying the IMF had backed her choices for economic recovery, and that her plans would tackle inherited challenges. She faces pressure to raise taxes later this year to meet budget targets, having already increased employer national insurance contributions in late 2024.
