“Scrap the Triple Lock Now” Says IFS Chief – What It Means for Your Pension
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.”
What Should Savers Do?
Check your state pension forecast (Gov.uk tool)
Boost private pensions – Tax relief may not last forever
Prepare for changes – Future governments will reform pensions
#Pension #TripleLock #StatePension #UKFinance #IFS #Retirement #TaxRelief #LabourGovernment
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Will Labour keep its promise? Or will economic pressures force a U-turn? Stay informed as this £45bn pension battle unfolds.