Should the pensions triple lock be scrapped?

The pensions triple lock had been a key plank of the government’s offer to older voters, but the promise to gold-plate the state pension is looking increasingly unaffordable.

Old ladies drinking champagne © Getty Images
Happy days for pensioners – but they might not last for much longer © Getty
(Image credit: Old ladies drinking champagne © Getty Images)

What is the pensions triple lock?

The pensions triple lock is the guarantee, introduced by the coalition government in 2011, that the state pension is increased each year by either the (CPI) inflation rate, the rise in average earnings, or 2.5% – whichever of those three is the highest. The lock applies to both the “basic” state pension and the higher, flat-rate pension paid to people retiring since April 2016. This year, for example, the pension rose by 3.9% in April, in line with the rise in average earnings last year. But when the government introduced the triple lock, it did not foresee the prolonged stagnation in real earnings growth, which has meant that a guaranteed 2.5% increase has served pensioners very well compared with workers. In the ten years since the financial crisis, state pensions have increased 37% in cash terms, compared with less than 20% for average earnings. The triple lock has become part of the Tory pitch to older voters: it was reaffirmed in the party’s election manifestos in 2015, 2017 and 2019. But now, chancellor Rishi Sunak is reportedly preparing to dump it.

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Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published Customers.com, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.   

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.