A financial expert has criticised Labour's proposed changes to the state pension triple lock, warning the Prime Minister is using the "wrong metric" to reform the system.
Proposed changes to the triple lock
Andy Burnham has announced that if Labour wins the 2029 election, the state pension will no longer rise by whichever is highest of 2.5%, average earnings or inflation from 2030. Instead, it will rise by the highest of inflation and 2.5%, with savings funding a new National Care Service.
Antonia Medlicott from Investing Insiders argues the government has "kept the wrong part" of the triple lock. She said: "The 2.5 per cent minimum is the part I'd have scrapped. Even in a year when prices and wages barely move, pensions still go up by 2.5 per cent."
Impact on future pensioners
The expert warns workers in their 30s, 40s and 50s to expect the state pension to be worth just 30% of typical full-time earnings. "That's a floor, not a retirement plan," she cautioned.
Medlicott expressed concern about the National Care Service funding, noting pensioners are being asked to accept smaller rises for a service that "hasn't been fully paid for yet." She warned families could still face large care bills despite the changes.
What it means for current pensioners
For current pensioners, the expert offered some reassurance that pensions won't go down and will still rise by at least inflation or 2.5%. However, she highlighted a looming tax squeeze, with the state pension set to exceed the tax-free allowance for the first time in 2027-28.
The changes come as 600,000 more pensioners have been pulled into paying income tax since 2021 due to frozen tax thresholds.
