What is the triple lock plus? Conservative state pension plan explained

The triple lock plus policy has been touted as a tax cut for pensioners. But experts have argued it could push the official retirement age higher, faster

Rishi Sunak announces the triple lock plus state pension policy at a general election campaign event (Photographer: Hollie Adams/Bloomberg via Getty Images)
Rishi Sunak says the Conservatives 'are on the side of pensioners' (Photographer: Hollie Adams/Bloomberg via Getty Images)
(Image credit: Getty Images)

The Conservative Party has brought in the second week of its 2024 general election campaign by announcing the 'triple lock plus' state pension policy.

Prime Minister Rishi Sunak’s party has promised that pensioners will be able to enjoy what it suggests would be an effective tax cut on top of the existing triple lock, if it gets re-elected on 4 July. Experts previously predicted the state pension could grow to a level that will see pensioners paying income tax before the end of the decade.

It comes after warnings that the pension policy is unsustainable in its current form. Respected non-partisan think tank the Institute for Fiscal Studies (IFS) has called for it to be scrapped. The next government already faces a possible £10bn bill to compensate Waspi women.

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Both the Conservatives and the Labour Party have committed to the triple lock. You can see exactly what another Tory government or a Labour-led government could mean for your money in our separate guides to the pledges and likely manifesto commitments they will make.

What is the triple lock plus?

On Monday (27 May), the Conservatives promised they would extend the triple lock if they are elected back into government in July.

Under the current triple lock policy, the state pension increases once a year. The amount it goes up by is determined by which of the following has the highest percentage: inflation, wage growth, or 2.5%.

In April, it increased 8.5% (up to £17.35 a week) in line with average earnings. The exact amount you receive depends on how many years of National Insurance contributions you’ve made - a figure you can top up online through the Check Your State Pension forecast tool.

At present, the maximum amount you can get from the state pension comes in at more than £11,500 a year - £1,000 below the top of the tax-free personal allowance for income tax (£12,570). It means that if any of the UK’s 12 million state pensioners supplement their income with part-time work or another income stream, they could find themselves paying tax.

Under the Conservative Party plans, the personal allowance pensioners receive will diverge from that of the working population. It too would rise by 2.5%, or in line with either earnings or inflation. The party said it would save retirees £275 by 2030, and cost the country £2.4bn a year by the end of the decade - a sum that would be paid for by more efficient tax collection, and a crackdown on tax avoidance and evasion.

What's been the political reaction to triple lock plus? 

Rishi Sunak said the policy showed his party was “on the side of pensioners”. The Prime Minister added: “The alternative is Labour dragging everyone in receipt of the full state pension into income tax for the first time in history."

Speaking to broadcasters on Tuesday morning, shadow Business Secretary Jonathan Reynolds described the move as “desperate”. He added that the costing of the Tories plan was “not credible”.

In an interview with the BBC, the SNP's Westminster leader Stephen Flynn said the policy would "ring hollow" in Scotland, where people have been "watching on as the economy collapsed beneath them".

Meanwhile, the Liberal Democrat’s Treasury spokesperson Sarah Olney claimed the tax savings pensioners would get through the pledge would be dwarfed by “stealth tax hikes” of £1,000 by 2027.

How have experts reacted to triple lock plus?

Triple lock plus has received a sceptical response from experts. Paul Johnson, director of the IFS, said that while there was a case for the state pension to have its own tax-free allowance, it was not the tax giveaway Rishi Sunak was portraying it as.

He said: “The proposal to ‘triple lock’ the income tax allowance for pensioners is another example of Conservatives proposing to undo their own tax policies. Pensioners used to have a higher tax allowance than working-age people. But since 2010, the tax allowance for pensioners has been cut by more than 10 per cent while that for working age people has risen by 30 per cent. Going forward, about half of this proposed tax cut is simply not following through with plans for tax rises pencilled in for the next three years.”

Lily Megson, policy director at retirement advice firm My Pension Expert, described the announcement as “too little, too late”. She said: "For too long, those in or nearing retirement have been overlooked. Meaningful policy to help address the financial challenges faced by over-60s has been lacking for many years, especially during the cost-of-living crisis.

“Rishi Sunak's late bid to close the gap on Labour by announcing favourable tax changes for those receiving a pension will do little to offer meaningful long-term assistance to those who have struggled under the burden of high inflation, high interest rates and a high tax burden."

Research by AJ Bell has suggested that the Conservatives’ electoral ploy could help to win over some older voters. A survey of 2,000 people it commissioned that was run in early May by Opinium found 41% of those aged 65+ said they would be less likely to vote for a party that had plans to ditch the triple lock, and replace it with an inflation-linked policy. This compared to 12% who felt the opposite.

However, the findings also suggested there would be a backlash from younger voters. Of those surveyed, 37% of 18 to 34-year-olds said they would be more likely to support a party that wanted to scrap the triple-lock, compared to 17% who would be less likely to do so.

Tom Selby, director of public policy at AJ Bell, said: “The next government should really be reviewing the state pension triple-lock and setting out a clear goal for the policy. Instead, Rishi Sunak has doubled down by promising not only to keep the pledge but extend it to the personal allowance for those over state pension age.

“The fact Sunak has not promised to increase the personal allowance for younger voters at the same time means he would effectively be driving a wedge between generations via the tax system. Creating a separate tax threshold for older people would also add unwelcome complexity to the income tax framework.”

Selby added that the policy would also be likely to mean that the “state pension age will need to rise faster” to cover the increasing cost of the triple lock. He said this would leave those below state pension age “paying the price again”.

According to Kirsty Anderson, retirement specialist at Quilter, triple lock plus also raises questions for Labour. She said that if Sir Keir Starmer’s party maintains the triple lock - something it has committed to do - “they too will need to raise the personal allowance”.

She added: “Our previous analysis found that pensioners could need to pay back a proportion of their state pension in income tax in just two years’ time. Simply from an administrative point of view this would prove difficult for HMRC, so it seems unlikely - if Labour were to get in - that they would not be forced to act in some way.”

Anderson called for a “more sensible approach” to the triple lock, more generally, which would “link pensions more closely to average earnings”. She said: “This would represent a good alternative as it would create a more predictable and sustainable pension system. This model not only aligns pension growth with national economic performance, but also fosters a fairer distribution of wealth across generations.

“This approach would mitigate the financial unpredictability associated with the triple lock, creating an easier way to effectively budget and ensure that pension increases do not disproportionately benefit one demographic at the expense of another.”

Henry Sandercock
Staff Writer

Henry Sandercock has spent more than eight years as a journalist covering a wide variety of beats. Having studied for an MA in journalism at the University of Kent, he started his career in the garden of England as a reporter for local TV channel KMTV. 

Henry then worked at the BBC for three years as a radio producer - mostly on BBC Radio 2 with Jeremy Vine, but also on major BBC Radio 4 programmes like The World at One, PM and Broadcasting House. Switching to print media, he covered fresh foods for respected magazine The Grocer for two years. 

After moving to NationalWorld.com - a national news site run by the publisher of The Scotsman and Yorkshire Post - Henry began reporting on the cost of living crisis, becoming the title’s money editor in early 2023. He covered everything from the energy crisis to scams, and inflation. You will now find him writing for MoneyWeek. Away from work, Henry lives in Edinburgh with his partner and their whippet Whisper.