The state pension triple lock should be abolished, according to a think tank founded by former Prime Minister Sir Tony Blair. The triple lock mechanism guarantees that the state pension rises each April based on the highest of three measures: average earnings growth between May and July, the inflation rate in September, or a minimum of 2.5%. Introduced by the coalition government in 2010 and first applied in the 2011/12 financial year, the policy has seen the state pension increase by 4.8% this year in line with wage growth.
Think Tank Calls for Reform
A report from the Tony Blair Institute (TBI) argues that the state pension is “outdated, increasingly unaffordable, and too rigid for the way people live and work.” The institute proposes replacing it with a new “lifespan fund,” which would build up entitlement over 20 years through activities such as work, caring, and study. This fund would allow individuals to access funds earlier in life, with those who do so automatically enrolled in higher National Insurance contributions upon returning to work.
Tom Smith, director of economic policy at the TBI, stated: “Britain’s state pension system was built for a different era. We can’t keep pouring money into a system that is increasingly unaffordable. Pension spending must be contained, and that means the triple lock cannot continue after the next election. Ending it will require political leadership from all parties – but that should only be the first step. Real reform must also build a better system: one that is fairer, more flexible, and designed for how people live today.”
Projected Costs and Demographics
The report highlights that the number of pensioners is expected to rise from 12.6 million today to nearly 19 million by 2070. Under the current system, state pension spending is projected to increase from around 5% of gross domestic product (GDP) to 7.8% over the same period. The TBI estimates that its proposed model would hold long-run state pension spending at approximately 5.5% of GDP, avoiding roughly £66 billion a year in additional costs by 2070 in today’s terms.
Mr Smith added: “TBI’s proposed Lifespan Fund offers that better alternative. It replaces the one-size-fits-all state pension with a personalised system that people build up through active contribution across their lives. It gives people real freedom to use support earlier in life – to retrain, care for relatives or manage periods out of work – and to top it back up before retiring on their own terms.”
Reactions and Government Position
Caroline Abrahams, charity director at Age UK, argued that the triple lock should be retained into the next parliament, stating that it has helped improve the living standards of some of the poorest pensioners. She said: “We continue to hear from older people who are struggling financially, and the extra money the triple lock delivers makes a meaningful difference to many lives. In new polling, three in 10 pensioners say they are struggling financially – even before the worrying rise in energy prices. Going forward, we need a national debate to determine the purpose and appropriate value of the state pension as, at present, it is set too low to provide those reliant on it with a decent standard of living throughout their later lives.”
A Department for Work and Pensions (DWP) spokesperson commented: “Supporting pensioners is a priority and our commitment to the triple lock for the rest of this Parliament means millions of pensioners will see their yearly state pension rise by up to £2,100. The Pensions Commission is already examining how we can ensure secure retirements for tomorrow’s pensioners and for those that have not reached state pension age but need extra support, a range of options such as universal credit and other means-tested and disability-related benefits are available.”
