The future of the state pension triple lock is uncertain after Andy Burnham indicated he would be willing to make tough decisions to fund adult social care. The policy, introduced by former Conservative Chancellor George Osborne in May 2010 and effective from the 2011/12 financial year, has become a political albatross due to its cost and perceived unfairness.
Currently, the state pension is worth about £241.30, typically paid every four weeks. To qualify, people need at least 10 years of National Insurance contributions to receive anything, and 35 years for the full amount.
How the triple lock works
The triple lock affects anyone receiving the state pension, including those who used the older system before April 2016. Each April, the increase is automatically calculated based on inflation, a minimum safety net of 2.5 per cent, and average wage growth.
Supporters argue the triple lock protects pensioners from poverty and has been praised for lifting worse-off retirees out of relative poverty. They also note the UK's state pension is lower than in other European countries, and the triple lock brings it up to the continent's overall standard.
Why it is controversial
Critics have argued since 2011/12 that the policy has become unsustainable and unfair on younger taxpayers. Because of how it is measured, the pension typically grows faster than the overall UK economy. The Office for Budget Responsibility has previously warned that as the population ages, it consumes a larger share of tax revenue, leaving less money for other sectors such as education and defence.
Pensioners are also protected from rough economic circumstances, even as working-age taxpayers see their wages freeze or fall due to inflation. Critics have also argued the triple lock is not effectively targeting those who could benefit most, as it applies to all eligible pensioners, including those with considerable wealth.
Potential impact of scrapping it
Should the triple lock be scrapped, pensioners could lose out on several hundred to over one thousand pounds each year in the next few years. Returning to an earnings link could save billions of pounds over several years. However, scrapping or even tinkering with the policy could lead to massive electoral consequences.
While some politicians have privately voiced concerns about retaining the triple lock in its current form, many across the political spectrum have hesitated to change it. Older voters typically turn out more than younger voters, risking major election blowback should any party propose to scrap it.
When asked about the triple lock, Education Secretary Lucy Powell said solving the adult social care crisis would not happen without "big conversations" about spending. She told Sky News that she did not know what Burnham will mention in his speech, but that there could be references to the triple lock.
"We are committed to the triple lock, it's in our manifesto," she said. "The triple lock has really delivered for pensioners in this country. Over the course of this parliament, I think we're going to see state pension rising by about £2,000 a year, significantly."
"And that's really important so pensioners can know, pensioners watching your show today can know, that their income is secure and will continue to rise over the course of this parliament."
"I don't know what Andy's going to say about that today, but I know that what he's talking about is this big conversation about solving these big problems, but being really honest with people that they come at a cost. They do come at a cost. You can't just solve the social care crisis without having the big conversations about how you're going to do that."
