Millions of pensioners face a more uncertain future after Prime Minister Andy Burnham announced plans to scrap the state pension triple lock from 2030. Financial experts have warned that the state pension’s value could steadily erode over time, particularly if wages regularly outpace inflation. The Express has long campaigned to protect the triple lock, which has lifted millions out of poverty. But pensioners also have to be ready if Burnham wins the election and finishes it off.
What the triple lock change means
Under the current system, the state pension rises each year by earnings growth, inflation, or 2.5%, whichever is highest. Burnham has proposed dropping the earnings element, while somehow preserving the state pension's value relative to pay. Savings will be used to fund his National Care Service, although taxes may also have to rise.
Iain McLellan, director at pension advisers Isio, warned that removing the earnings element could see state pensioners falling behind working-age incomes over time. “This will hit both existing pensioners and millions of people planning for retirement.” But it’s not a done deal yet. “If the reaction to the removal of the winter fuel payment was anything to go by, reforming the triple lock risks being political kryptonite.”
Experts warn of financial impact
Mark Futcher, head of DC pensions at Howden Employee Benefits, said workplace and private pensions would have to shoulder more of the burden if it were to go. “Any change must be accompanied by credible measures to improve pension adequacy and help people build sufficient savings for later life.”
Almost eight in 10 over-55s fear the change will leave them financially worse off, research from My Pension Expert shows, and policy director Lily Megson-Harvey said: “The government must be clear about how the new system will work and how the state pension will maintain its value relative to earnings.”
Antonia Medlicott, managing director at Investing Insiders, warned that this will make many pensioners worse off. “Anyone cheering should remember that for up to a million pensioners, the state pension is their only income. Rip it out carelessly, and you push the poorest pensioners straight back towards poverty.”
Five steps to protect your retirement
Michele Tieghi, financial expert and founder of Psyfi Money, outlined five ways to strengthen your own retirement finances, in case the triple lock does fall.
1. Check for missing National Insurance years. Your state pension partly depends on your National Insurance (NI) record. You need at least 10 qualifying years to receive anything, while 35 years will usually secure the full new state pension. This could affect people who were unemployed, earned too little to pay NI, lived abroad or failed to make the relevant contributions while self-employed. Check your record on the Government website GOV.UK. In some circumstances, you can make voluntary contributions to turn an incomplete year into a qualifying one. Filling the three missing years could add £20.68 per week, or roughly £1,075 per year.
2. Increase private pension contributions before retirement. If still working, increasing contributions to a workplace or personal pension could help offset any future shortfall, Tieghi said. “Putting in an extra £100 a month means saving £1,200 a year. Basic-rate taxpayers receiving 20% tax relief would only need to contribute £80 themselves.” Returns aren’t guaranteed, and pension money is generally locked away until age 55 (rising to 57 from 2028).
3. Consider deferring your state pension. You don’t have to claim your state pension as soon as you reach state pension age. Deferring it can increase your later payments. For people reaching state pension age under the new rules, payments rise by 1% for every nine weeks deferred, equivalent to just under 5.8% for a full year. On the current full new state pension of £241.30 a week, a year’s deferral would add around £13.99 a week, or £728 a year. There’s a catch, Tieghi said. “It’s important to remember that you would have given up £12,548, and it would take 17 years to make that back.” Deferring may suit some, but it’s not a free income boost.
4. Make sure you’re claiming Pension Credit. Lower-income pensioners should check whether they qualify for Pension Credit, which provides a vital safety net. The Guarantee Credit element can top up income to £238 a week for a single pensioner or £363.25 for a couple today. It can also unlock support worth thousands, including help with council tax, housing costs, dental treatment and heating-related assistance. It’s means-tested, so not everyone will qualify. But those struggling on a low income shouldn’t assume they’re ineligible without checking.
5. Build accessible savings alongside a pension. Putting money into an accessible savings account before retirement can reduce reliance on state and private pensions. Cash and Stocks, and Shares ISAs offer tax-free returns, although investments can fall as well as rise. Saving £50 a month for 10 years at an assumed 4% return would build a pot of around £7,360, Tieghi calculates. That money could continue to grow during retirement while remaining accessible when bills arrive.
The triple lock isn’t dead yet. The Express will continue its fight to preserve it. While the struggle goes on, checking your entitlements, building savings where possible and claiming support could help if the worst does happen.
