Andy Burnham has clarified Labour's proposed changes to the State Pension triple lock, saying pensions will continue to rise and that the savings will help fund a National Care Service. The Prime Minister confirmed the party intends to reform the mechanism determining yearly increases if it wins the next general election.
How the triple lock works now and the proposed change
Under current rules, the State Pension increases each April by the highest of inflation, average earnings growth or 2.5%. The proposed reforms, unveiled during the Labour Party Conference, would change this so that the pension rises by the greater of inflation and 2.5%, rather than the highest of the three.
Data from the Institute for Fiscal Studies shows that since the triple lock was introduced in 2011, State Pension values have risen considerably faster than if they had followed only prices or earnings. The pension is now approximately 14% higher than it would have been if it had only tracked earnings.
What the change means for pensioners
At present, most people on a full State Pension receive £241.30 a week. Under the triple lock, this is likely to increase to approximately £250.70 a week in April 2027. The proposed changes would apply to those born between 1967 and 1996.
Funds generated through the modifications will go towards establishing a National Care Service, designed to address care costs borne by families while alleviating pressures on the NHS.
Mixed reactions and Burnham's defence
The proposals have provoked a mixed response. Sharon Graham, general secretary of the Unite union, cautioned that the plans risked amounting to "electoral suicide". Conversely, Tom Pope, chief economist at the think tank Institute for Government, welcomed the move, stating the triple lock was "a much more sensible way to increase pensions".
Writing on his Facebook page, Burnham said: "I want to explain what's happening with the Triple Lock and why. The first thing to know is this: The state pension will keep going up. The Triple Lock means your pension rises each year by whichever is highest: inflation, wages or 2.5%. So it's always rising."
"That exact system will stay in place until the end of this Parliament. Then, pensions will still continue to rise every year. Going up at least by inflation or 2.5%, whichever is higher. And under these proposals, wages still matter too. The state pension will continue to keep pace with earnings over time."
"The savings generated from this adjustment will help to fund a National Care Service, so older people can have the security of a State Pension that keeps rising every year, and the peace of mind of knowing they won't face catastrophic care costs if they need support later in life. I think this is a fairer deal for older people. What do you think?"
The post generated thousands of responses alongside more than 18,000 likes, with opinions sharply divided. David questioned: "Why is it that when the country needs to raise money it always looks at raising it from the poorest in society i.e. pensioners and people on benefits. State pension is not a benefit it is a payment from an insurance policy that has matured."
Brenda suggested: "It would be fairer to give pensioners the living wage and link future increases to MP's pay rises." However, Stephanie supported the proposal, stating: "It's fair, and I speak as someone a few years away from state pension age who this will affect. If we want an NHS that works then we need a care system that works too."
