- The Resolution Foundation has today issued a paper arguing the triple lock on the state pension has outlived its purpose and should be replaced
- It lays out that the triple lock guarantee is no longer needed to address pensioner poverty as the typical pensioner household now has broadly the same income as the typical working-age household
- It also believes it is fiscally unsustainable, with state pension spending already £154 billion and projected by the OBR to rise by a further £80 billion over the next 50 years
- This latest call for a review follows similar interventions on the triple lock in recent months by Tony Blair and Jeremy Hunt
- Dr Suzy Morrissey is due to imminently publish her review of the framework to set future state pension ages, which will form the basis of a government review next year
Rachel Vahey, head of public policy at AJ Bell, comments:
“The Resolution Foundation has added fresh momentum to an increasingly important debate. The triple lock has played a valuable role in boosting the state pension, but the bigger question now is what it is ultimately meant to achieve and whether it’s sustainable in the short, medium and long term.
“This matters not just for today’s retirees, but for future generations too. The state pension is one of the biggest spending commitments on the public finances and is only set to increase costs further in the years to come.
“Ministers cannot dodge this difficult topic forever. Instead, the government needs to have a proper conversation about its long-term future.
“If the government wants to move the debate forward, it first needs to be clear about the income level it believes the state pension should provide. Once that target is set, there can be a more constructive discussion about how best to get there. A smoother link to earnings, for example, could be one option worth exploring, particularly as it would avoid some of the sharp year-to-year swings we have seen recently under the triple lock.
“With the independent review of the framework for future state pension age decisions due shortly, the government now has a real opportunity to finally face the music and set out a clearer long-term plan.”
Source: Resolution Foundation
