The future of the state pension triple lock seems to be forever under scrutiny and Andy Burnham may find himself under immediate pressure to address the “divisive mechanism”, said interactive investor.
The latest Fiscal Risks and Sustainability report from the Office for Budget Responsibility forecasts that state pension spending will rise from 5% to 9% of GDP over the next 50 years “driven by population ageing and the cost of the triple lock”. A third of this is down to the cost of the triple lock.
Burnham recently told a Reddit Ask Me Anything session that while he appreciates there is “a lot of debate” around the question, it is important that Labour’s manifesto commitment to retaining the triple lock stands.
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It seems then that Burnham has committed to keeping the state pension triple lock for now, but it leaves the future unclear after 2029.
The longer term outlook offers “less clarity”, said interactive investor, as concerns over the “cost of operating the mechanism aren’t going to abate any time soon”.
What is the triple lock?
The policy was introduced in 2010 by the coalition government. It was designed to help protect pensioners' incomes by increasing the state pension in line with average wages, inflation, or by 2.5%, whichever is higher.
The wage data is based on pay growth figures for May to July, released in September by the Office for National Statistics.
The Institute for Fiscal Studies (IFS) has warned the triple lock is “increasing public finance pressures” and risks the sustainability of the state pension system, creating “heightened uncertainty” for people retiring in the future.
Why is the triple lock so controversial?
The main criticism of the scheme said MoneyWeek, concerns the “cost and the intergenerational fairness”, as the increases are often out of sync with pay rises of the younger generations.
Department for Work and Pensions spending on the state pension has increased from £69.8 billion when it launched in 2010 to £146.1 billion in 2025.
The Resolution Foundation says the state pension bill is £12.6 billion higher than it would have been under a smoothed earnings link. The “polite way” to address this, said the think tank, is to say that the triple lock was “a good policy for a period but it is no longer justified”.
The OBR said it has cost around three times more than initial expectations, “primarily because the period since 2012 has seen more volatile inflation and lower earnings growth than the two decades prior to the triple lock’s introduction”.
By how much could the state pension rise?
Those on the new full state pension now receive £241.30 a week since April 2026, up 4.8% annually because of the triple lock guarantee.
Pensioners and those approaching retirement may be looking forward to the increase, but frozen income tax thresholds mean “many more” pensioners will start “paying tax on their state pension”, said MoneySavingExpert. This is because the annual payments of £12,547.60 are close to breaching the personal tax allowance of £12,570. There is a concession from paying the tax if a pensioner's only income is from their state pension.
What is the triple lock alternative?
Despite the “escalating costs”, said MoneyWeek, only the Green Party has proposed getting rid of it. The Conservatives have suggested means-testing the state pension and the “political danger” hasn’t stopped “various think tanks and working groups from weighing in with their suggestions”.
The Institute for Fiscal Studies (IFS) has suggested a “better approach” to the triple lock would be to uprate the state pension in line with a “smoothed earnings link”, similar to the system used in Australia. This would see the government set a target level for the state pension based on a share of median full-time earnings.
Meanwhile, the Tony Blair Institute for Global Change has proposed replacing it with a ‘Lifespan Fund’ where individual payments would be uprated annually to ensure they kept up with median earnings.
Alternatively, the Intergenerational Foundation has suggested capping yearly state pension increases at inflation until 2031, and from then on uprating it by the average of inflation and earnings.
A more “pessimistic scenario”, said Unbiased, would be for the state pension to have only a single lock, linked either to wages or inflation, but this may mean pensioners' spending power is reduced over the medium to long term.
The worst-case scenario would be returning to when the state pension was “simply made at the whim of the chancellor”, the financial website added.
Another “solution” would be to “make people work longer”, said The Telegraph’s Mattie Brignal, by raising the state pension age, which is currently at 67 for both men and women born in or after 1960, and set to rise to 68 for those born in or after 1977.
An increase to the state pension age has previously served as a “silver bullet” in order to “keep the state pension system ticking along”, but is “deeply unpopular”.
While neither party has plans to increase the state pension age, “in reality” there may be “little choice” in the future for Burnham or whoever is in charge.
