Triple lock alternatives: will the government reform the state pension?

The state pension triple lock is loved by pensioners but expensive for the taxpayer, making it a political hot potato.

The policy increases state pension payments each year in line with inflation, wage growth, or by 2.5% – whichever is highest.

In April this year, the state pension increased by 4.1%. Over the course of the year, recipients of the full new state pension will get a pay rise of £472 as a result.

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The triple lock policy was introduced by the coalition government in 2010 to protect the real value of pensioners’ incomes being eroded by inflation.

An ageing population and high inflation has made the policy more expensive in recent years, and critics argue it is unsustainable.

The state pension cost the government £138 billion in 2024/25, equivalent to around 5% of GDP.

The cost is expected to spiral further as the pensioner population grows. The number of people at state pension age is expected to increase by 14% between mid-2022 and mid-2032, according to a report published by the Office for National Statistics (ONS) in January 2025.

Many feel it is unfair to ask taxpayers to fund the policy at a time when their own finances are being squeezed.

There is a generational divide when it comes to attitudes towards the triple lock. Just over half (54%) of gen Z see it as a fair policy, compared to two thirds (67%) of millennials and three quarters (75%) of baby boomers, according to research from J.P. Morgan Personal Investing.

The study also revealed pessimism among younger people about the existence of the state pension by the time they are old enough to claim it, with 44% of millennials believing it won’t exist at all and 59% thinking it will be worth “a lot less”.

“Longer life expectancies and fewer working age adults have dramatically increased the cost of the state pension, despite increases in the retirement age,” said Claire Exley, head of financial advice and guidance at J.P. Morgan Personal Investing. “While the triple lock has seen it become relatively more generous over time, it is clear that many younger people have little faith that the state pension will be there for them when they retire.”

How likely is a change to the triple lock?

The government has promised not to change the triple lock this Parliament, but its future looks less certain beyond then.

In July, chancellor Rachel Reeves launched the next phase of the government’s pensions review. This included reviving the Pensions Commission to tackle a savings crisis that is set to leave pensioners in 2050 worse off than today’s retirees. In August, the government launched a review of the state pension age, which will explore whether it should automatically increase in line with rising life expectancy, potentially pushing the state pension age up to 70. So far, nothing is on the table in regards to the triple lock.

“For millions of pensioners, the state pension is the bedrock of their retirement income,” said Damon Hopkins, head of DC workplace savings at consultancy Broadstone.

“Any changes to the triple lock, an acceleration of state pension age [increases], or moves towards means-testing would be highly controversial.”

Possible state pension reforms

The political danger of tinkering with the triple lock hasn’t stopped various think tanks and working groups from weighing in with their suggestions.

In September 2025, the Institute of Economic Affairs (IEA) suggested an inflation-linked-only state pension. By 2023/24, the state pension was £300 a year higher than it would have been under the Tony Blair-era inflation/earnings link, and £800 a year higher than under a simple inflation uprating, according to the IEA’s calculations. Considering 13 million pensioners receive the state pension, uprating by inflation would save the government a lot of money.

But as Len Shackleton, editorial and research fellow at the IEA acknowledged, “whether any party has the bottle to go down that route, given the size of the pensioner vote, looks doubtful”.

In July, the Institute for Fiscal Studies recommended a double-lock system that would uprate the state pension in line with whichever is higher out of average wage growth or inflation.

And in 2024, the Pensions Policy Institute (PPI), an independent research organisation, published a briefing paper highlighting three alternatives to the state pension triple lock.

As well as a double lock – similar to the IFS’s recommendation – the PPI looked at two earnings-linked options.

• Earnings-linked option one: This route would increase the state pension in line with earnings growth.
• Earnings-linked option two: This option would increase the state pension by an average of CPI and earnings growth.

The first earnings-linked option risks leaving pensioners exposed in periods where the rate of inflation outstrips wage increases, but the second offers more of a compromise.

Among the drawbacks of an approach like this would be the idea that younger generations would fear the state pension would be eroded before they had a chance to receive it.

Should the state pension be means-tested?

Speaking to LBC in January, Conservative Party leader Kemi Badenoch suggested means-testing the state pension.

“Starting with the triple lock is not how to solve the problem,” she said. “We are going to look at means-testing. Means-testing is something which we don't do properly here.”

The Conservatives are no longer in power so there is no suggestion this policy will be adopted. It would almost certainly prove deeply unpopular.

Commenting at the time, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “The state pension forms the bedrock of people’s retirement income and there are very few people who are not reliant on it to some extent.

"Talk of means-testing the state pension causes huge concern and could get in the way of people making decisions such as buying National Insurance credits that could improve how much they receive."

Morrissey warned that these kinds of rumours can lead to people being turned off pension saving because they feel they will be penalised for doing the right thing, losing their state entitlement because they have built up sufficient wealth elsewhere.

Others could end up leaving themselves short today – effectively over-saving – because they are worried that they may not get a state pension later on.

The IFS is also against managing costs in this way. In its recent pensions review, the think tank urged the government to commit to never means-testing the state pension.

“This promise would help working-age people in planning their retirement, as they could have trust in the state pension being available,” the think tank said. “It is also worth noting that the state pension makes up a large part of incomes even for people on higher incomes.”

The IFS pointed to research which shows the state pension accounts for 71% of retirement income for low-income pensioners (bottom fifth). Even among the richest fifth, it accounts for 23%.

There is some support for means testing the state pension, though, with J.P.Morgan Personal Investing’s research showing that 53% of gen Z and 57% millennials in favour of means-testing it.

Surprisingly there is some support for means-testing the state pension among those already retired, with 32% of baby boomers and 31% of the silent generation in favour.

Even more counter-intuitively, support for means-testing was highest among wealthier individuals (who will be hit hardest by it); among those earning £90,000 or more support for means-testing was 63%, compared to 47% amongst all adults.

Could the number of contribution years to get the state pension rise?

Another way to reduce the cost of the state pension is to tighten the eligibility criteria, something the IEA has also proposed, by increasing the number of years of National Insurance contributions required.

The state pension is not automatic for those reaching 66. You need at least 10 qualifying years on your National Insurance record to get the state pension.

At the moment you need a full 35 years of contributions to receive the full new state pension; if you have fewer years, your pension is reduced pro rata. You need 10 years of contributions to get any pension at all.

In the recent past, as a male, you needed 44 years of contributions to receive a pension at 65; a woman needed to have paid in for 39 years to get a pension at 60. Even in France, where pensions are payable at 62, you need 43 years in the system to get a full pension.

According to the IEA’s Shackleton, this suggests the UK’s current 35-year NI requirement, particularly with a rising state pension age, “is not a big ask – particularly as there are various credits if you are not working through caring responsibilities, illness and so on”.

“So we could conceivably phase in a requirement for, say, 40 years of contributions to receive a full pension and 15 years to get any pension,” he said.

“It wouldn’t affect current pensions in payment, but it would over time reduce the amount paid out. The main sufferers would probably be recent migrants.”