Key facts
- The UK state pension triple lock will be reformed from April 2030.
- The new system will link pension increases to the higher of inflation or 2.5%.
- Savings from the reform will fund a new National Care Service.
- The current triple lock guarantees increases based on inflation, wage growth, or 2.5%, whichever is highest.
- The Labour Party estimates annual savings of £15 billion by the late 2030s, rising to £50 billion by 2050.
Prime Minister Andy Burnham has confirmed that the UK's state pension triple lock will be reformed from April 2030, with the savings generated to be used to fund a new National Care Service. Burnham stated that the triple lock will remain unchanged for the rest of the current parliament, honoring a manifesto pledge.
From April 2030, the state pension will increase annually by the higher of inflation or 2.5%, a change from the current system which guarantees an increase based on whichever is highest among inflation, average wage increases, or 2.5%. The Institute for Fiscal Studies (IFS) noted that this change means the state pension will not automatically jump with average wage increases every year but will broadly track them over a longer period. The IFS estimates that the current triple lock would increase annual state pension expenditure by £16 billion a year by 2026-27 compared to if it had risen with average earnings since 2011. The proposed new system, according to the IFS, would have resulted in spending being £9 billion a year lower than it currently is.
The Labour Party estimates that the triple lock adjustment will save £15 billion annually by the end of the 2030s, rising to £50 billion per year by 2050. Burnham emphasized that these savings would ensure low-income pensioners do not pay care charges and would contribute to building a high-quality National Care Service.
However, Sharon Graham, general secretary of the Unite union, criticized the potential reform, calling it "electoral suicide" and morally wrong to take security from pensioners to fund social care, suggesting instead that the wealthy should be taxed. Burnham also shared personal anecdotes about the state of social care, highlighting his grandmother's experience and expressing regret for the political generation's failure to address the issue.