26 million Brits at risk of retirement shortfall if state pension triple lock were to be scrapped

Millions more Brits would face a significant fall in their standard of living when they retire if the state pension triple lock were to be scrapped, according to new figures. The number of those facing a severe shortfall could be as high as 26.1 million.

Already, 14.6 million working age people in the UK are believed to be under-saving for retirement, according to the Department for Work and Pensions (DWP) – meaning they can expect a big drop off in the lifestyle they can afford pre and post work.

But this widely used figure assumes the state pension triple lock – where the state pension rises every year by the higher of inflation, wage growth or 2.5% – will continue for the next 50 years.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The state pension, currently £11,973 or £230.25 per week for those getting the full new state pension, is the bedrock of many current retirees’ retirement income. However critics say the triple lock is unaffordable and should be switched to a double lock system of only rising by inflation or wage growth.

Now new figures from a Freedom of Information request to the DWP have revealed the impact hypothetically dropping the triple lock would make.

Compared with 14.6 million under-saving on the official figures (43% of working age people), this would rise to 19 million facing a significant shortfall with an earnings link (56%) and as many as 26.1 million (77%) with an inflation link on the state pension.

The FOI also revealed figures for how many people would fail to get even the ‘minimum’ retirement income standard set by Pensions UK – currently £13,400 per year for a single person.

This rises from 4.6 million under the triple lock to 6 million under an earnings link and as many as 11.7 million under an inflation link – roughly one in three of today’s workers.

Steve Webb, former pensions minister and current partner at pension consultancy LCP, who obtained the data via the FOI, said: “These shocking figures reveal that the true state of under-saving for retirement in Britain is far greater than has previously been admitted.

“Very few people expect the triple lock to continue for another 50 years, yet this is the basis on which the government has so far published estimates. If the triple lock were to be replaced by an earnings link, millions more people would face a sharp drop in their standard of living when they retire.

“And a prices link, as was the policy until 2010, would see around one in three of today’s workers set to retire short of even a bare ‘minimum’ standard of living.”

How much do you need in retirement?

The Department for Work and Pensions' FOI provides three benchmarks for how much people might need in retirement:

1. A ‘target replacement rate’ – basically that the median earner should be able to replace about 67% of their pre-retirement income when they retire; the lowest earners need to replace 80% of their income post-retirement on this benchmark, and the highest earners need to replace 50%.

2. The ‘minimum’ benchmark set by Pensions UK (previously the PLSA) for a very basic retirement – estimated to be £13,400 for a single person.

3. The ‘moderate’ benchmark set by Pensions UK for a ‘middling’ retirement – estimated to be £31,700 a year.

The table below shows DWP’s estimates for how many people are under-saving relative to these benchmarks. The first row is the figure published in July 2025, based on the triple lock continuing indefinitely.

Rows two and three, based on the FOI, show what the figures would be if the pension were instead linked to average earnings or the Consumer Prices Index (CPI).

Sources: Triple lock figures from DWP, Analysis of Future Pension Incomes 2025. Other figures from Steve Webb FOI, and author’s calculations.

We look at how much you need saved for a comfortable retirement in a separate article.

Budget pension raid?

These latest figures are likely to make for uncomfortable reading for chancellor Rachel Reeves ahead of her upcoming Budget on 26 November.

While rumours she could cut the amount of tax-free cash pensioners can take, or limit tax relief, seem to have been quashed, speculation has since pointed to her tightening the rules on pension salary sacrifice schemes, with a potential £2,000 a year cap.

“It seems to me that we are living in a bit of a ‘fool’s paradise’ with regard to the scale of the under-saving crisis – something that a Budget tax raid on pensions, via a cap on salary sacrifice, is likely to make worse,” said Webb.

“Against this backdrop, the chancellor should be taking measures in the Budget to boost pension saving, not undermine it.”