The State Pension age would have to rise above 70 to fund the Conservatives' pledge to keep the triple lock, pensions minister Torsten Bell has claimed.
In a speech at the Labour Party conference in September, Prime Minister Andy Burnham set out plans to move the State Pension away from the current triple lock policy. The State Pension is currently uprated in line with inflation, average earnings, or 2.5%, whichever is highest. The three-layered protection was introduced by the Lib Dem-Conservative government in 2010 to tackle pensioner poverty and ensure the State Pension kept pace with the cost of living and rising wages.
However, compounded increases mean the policy is now far more costly than initially expected and is rising faster than average earnings.
Government confirms changes from 2030
In his first Budget as Chancellor in late October, John Healey confirmed the Government's commitment to altering the current system. He said: “The Prime Minister has already announced that from 2030 we will adjust the Triple Lock so that the State Pension rises every year and keeps pace with their earnings and inflation.” Mr Healey added the move would save around £15 billion a year by the end of the 2030s.
In a video shared on social media last week, the Department for Work and Pensions (DWP) explained how the new mechanism will work. The voiceover said: "We're adjusting it so it rises each year by inflation, 2.5%, or the amount needed to maintain its value relative to earnings. This means the State Pension will keep up with earnings over time, instead of growing faster than them, which it does now."
The video added: "Nothing changes until 2030. And the State Pension will still rise every year after that. This adjustment will make a fairer, more sustainable pensions system for everyone."
Conservative opposition and potential impact
The Government plans to pass legislation on the change before the next general election, which must be held by August 2029 at the latest. If the Labour Government remains in power, it could then implement the policy. The Tories have opposed the plan, committing to keep the triple lock in place if they return to government, but have not set out how this would be funded.
The Government estimates that annual savings from a reformed triple lock would be around £50 billion a year by 2050. Mr Bell claims the Tories would be forced to speed up planned State Pension age increases to mitigate the cost if they keep the policy. He told The Guardian: “If you don’t want to have an adjustment to the triple lock, then you will need to do other things to make the state pension remotely sustainable. We don’t need to guess what they would do because they’ve literally just done it, which is they repeatedly and at very short notice accelerated the increases in the state pension age.”
The State Pension age is currently being increased from 66 to 67 for both men and women under the accelerated timeline, with a further increase to 68 currently expected between 2044 and 2046. Mr Bell said the Tories could be forced to raise it higher still: “All I’m saying is, Conservatives do raise the state pension age aggressively, and they have. And even though they know that the triple lock should change, they are opposing it – and the consequence of that is they would end up making people wait into their 70s.”
The Conservative Party has been approached for comment.
Current State Pension details
The full rate of the new State Pension is £241.30 a week, though the amount received can differ depending on whether the recipient was contracted out before 2016, the number of National Insurance qualifying years, and whether they paid into the Additional State Pension before 2016.
The State Pension amount depends on the National Insurance record. The new State Pension can be claimed on reaching State Pension age by men born on or after April 6, 1951, and women born on or after April 6, 1953. Anyone born before that will receive the basic State Pension. More information is available on the GOV.UK website.
