A commentator warned the state pension bill is ‘only going to go up’ due to the triple lock.
Prime Minister Andy Burnham (Image: Getty)
Andy Burnham has been warned the state pension triple lock “has to go” to fund an uplift in defence spending. The Prime Minister is under growing pressure to cut the welfare bill in order to boost the military budget amid rising tensions with Russia.
The triple lock, introduced in 2011 by the Tory–Lib Dem coalition. sees the state pension rise every year by whichever is the highest out of earnings growth, inflation or 2.5%. Most of the major parties, including Labour and the Conservatives, are in favour of keeping it. However, commentators and some organisations have voiced concern as its costs continue to soar.
There are growing calls for defence spending to be ramped up (Image: Getty)
David Blair, The Telegraph‘s chief foreign affairs commentator, said he believes the triple lock should be axed to give more cash to the Ministry of Defence.
In an op ed, he wrote: “If, like me, you constantly urge the British state to invest more in defence, then you have even more of a moral responsibility to show where the money comes from. So here goes. We need to abandon the “triple lock”.”
He added: “When they invented the triple lock, the Conservative-Lib Dem coalition assumed it would cause pensions to rise by only 0.2 per cent above average earnings, with a price tag of an extra £5.2bn by 2029, even accounting for an ageing population.
“In fact, real wages have grown by less than forecast, meaning that the additional cost of the triple lock reached £12bn this year and will climb to £15.5bn – three times the predicted sum – by 2029, according to the Office for Budget Responsibility (OBR).”
The commentator said the bill is “only going to go up”.
Official forecasts show the state pension is set to hit almost 9% of GDP by 2075.
Britain currently spends around 5% of its GDP on state pensions.
Defence spending is expected to account for 2.6% of the UK’s national income in 2026.
Many experts have warned current defence plans are insufficient amid the tensions with Russia.
The Conservatives are calling for defence spending to hit 3% by 2030, rather than in the next parliament as pledged by the Government.
Mr Blair said he would replace the triple lock from 2027, with the state pension instead rising by inflation only.
He concluded his piece by writing: “Cut welfare to fund defence. End the triple lock to ease the burden on future generations. Not easy – and there would be many losers – but it would be right.”
It comes days after Baroness Therese Coffey, Conservative work and pensions secretary between 2019 and 2022, said the triple lock should “probably” be replaced.
The British Chambers of Commerce has called on the Prime Minister to scrap the triple lock, claiming it would save more than £3 billion across two years.
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Triple lock change to hand extra £9.40 to state pensioners under 77
Prime Minister Andy Burnham has unveiled plans to change the triple lock.
Andy Burnham has unveiled plans to end the triple lock in 2030 (Image: Getty)
A triple lock change is set to hand an extra £9.40 per week to state pensioners aged 77 and under from next April.
The weekly increase comes from the annual rise to State Pension rates, which increase at the start of each new tax year in line with the triple lock. This is a UK Government guarantee that the State Pension will rise every year by the highest out of three measures: the consumer price index (CPI) measure of inflation (measured for September the year before), average wage growth between May and July the previous year, or a minimum of 2.5%. While Prime Minister Andy Burnham has unveiled plans to end the triple lock in 2030 to remove the link to average earnings, the system is set to remain unchanged until the end of this Parliament.
As such, State Pension rates are set to rise by 3.9% from April 2027 in line with average wage growth, as it’s the highest out of the triple lock measures, as it was last year.
With a 3.9% boost to rates in the pipeline, this would take the new State Pension from £241.30 per week up to £250.70, giving pensioners entitled to the maximum amount an extra £9.40 per week in the 2027 to 2028 tax year.
Over a full 12 months, this amounts to an annual payment boost of £488.80 if you’re eligible for the full amount. This uplift would apply to new state pensioners who reached State Pension age from April 6, 2016, when the qualifying age was set at 63 to 65. This later continued to rise to age 66, meaning new state pensioners will now all be aged under 77.
As for older pensioners who get the old basic State Pension, a 3.9% increase would take rates to £192.10 per week, up from £184.90, giving pensioners entitled to the full amount a weekly payment increase of £7.20, or an extra £374.40 annually.
You’ll get the basic State Pension if you’re a man born before April 6, 1951, or woman born before April 6, 1953, but your payment amount depends on your National Insurance record.
Of course, these figures are based on the maximum possible amount for those with a full qualifying National Insurance record, so those without enough qualifying years will receive less.
Ed Monk, Associate Director at Fidelity International, explained: “The State Pension in the current 2026/27 financial year is set at £241.30 a week, or £12,548 a year, for those claiming the full new State Pension. That follows a 4.8% rise from the year before based on the increase in wages, which was the highest of the three measures.
“And we now know the rise that will apply in the 2027-28 tax year. In April 2027 the State Pension will rise to £250.70 a week – £13,036.40 a year – following a 3.9% rise in wages that was confirmed in labour market data published this month.
“Consider that as recently as the 2022/23 tax year it was just £185.15 a week – meaning that by next year it will have risen by more than 35% in five years.”
Under Mr Burnham’s plans, the triple lock will end in 2030 and instead move to a proposed ‘double lock’ system which would see State Pension rates increase either by CPI inflation or a minimum of 2.5%.
The PM said this would generate “significant savings” by removing the link to average earnings, with this money then freed up to help build up a new National Care Service.
Mr Burnham said the State Pension “will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation”.
In response to Mr Burnham’s announcement, Kate Smith, head of pensions at Aegon, said: “For millions of people, the state pension is the bedrock of retirement income and will continue to be so.
“Increases in earnings will still have a role to play, so pensioners are able to share in the relative prosperity and won’t lose out if UK earnings significantly outperform price increases. However, it’s unclear how this will work in practice… We await the detail.”
