The state pension triple lock should be abolished “as soon as possible”, according to the Institute for Fiscal Studies (IFS), as the policy threatens to cost taxpayers £45bn a year by 2050.
Key Takeaways: The Triple Lock Debate
✅ What is the triple lock?
Guarantees yearly state pension increases by the highest of:
Inflation (CPI)
Average earnings growth
2.5% minimum
✅ Current costs & projections
Adds £11bn/year to public spending
Could hit £45bn/year by 2050 (IFS estimate)
State pension bill: £145.6bn in 2025/26
✅ Labour’s stance
Pledged to keep triple lock until 2029
But faces £22bn fiscal black hole
Why the IFS Says It’s Unsustainable
Paul Johnson (outgoing IFS director) warns:
“The triple lock can’t go on forever. We should cap pensions at 33% of median earnings, then switch to a smoothed earnings link.”
Proposed Alternatives to the Triple Lock
Policy How It Works Pros Cons
Double Lock Tied to inflation + earnings Less costly than triple lock Still unpredictable
Smoothed Earnings Link Long-term wage growth + inflation top-ups More stable for budgets Slower pension growth
Fixed % of Median Earnings (e.g., 33%) Prevents runaway costs Clear long-term planning Less protection in crises
Will the Triple Lock Be Scrapped?
Political risks: Isle of Man reversed its double lock plan after backlash
Labour’s dilemma: Must choose between pensioner votes and economic reality
Tax relief fears: IFS warns against cutting pension tax breaks for workers
What Happens Next?
🔹 If triple lock stays: Pensions keep outpacing wages, straining public finances
🔹 If reformed: Could save £22bn+, but risk alienating older voters
Torsten Bell (Pensions Minister):
“A smoothed earnings link could save 0.5% of GDP by 2040s – half the cost of current plans.”