Chancellor vows to keep pension triple lock

Chancellor vows to keep pension triple lock

Mar 29, 2024

Pensioners will see an extension of the triple lock in the Conservative manifesto, the Chancellor has confirmed

Jeremy Hunt indicated that the Conservatives are planning to keep the pension triple lock, which sees the state pension rise by the highest of either inflation, average wage rises or 2.5%.

When he appeared on the BBC’s Sunday with Laura Kuenssberg he said the triple lock would ‘absolutely’ remain. The pledge will be in the manifesto, Hunt stressed, although a date for the next general election has not yet been set. An election has to be held by 28 January 2025 at the latest under the fixed term rules.

‘When we came to office in 2010, pensioners were more likely to be in poverty than any other income groups, now because of the triple lock that we introduced they are less likely to be in poverty,’ the Chancellor said.

He also stressed that pensioners are unable to boost their income as they no longer work, which was an important reason for the triple lock approach.

Total state pension spending is expected to hit £124bn in 2023/24, according to the latest DWP estimates.

Over the next five years retaining the triple-lock could cost taxpayers around £13bn versus linking the state pension to inflation, experts at AJ Bell said. The full new state pension could pass £13,000 a year by 2030 as a result which would drag all pensioners into base rate income tax.

Tom Selby, director of public policy at AJ Bell, said: ‘The state pension represents a colossal chunk of government spending. This means Chancellor Jeremy Hunt’s commitment to retaining the triple lock for the next parliament would also come with a hefty price tag for UK taxpayers.

‘This may be viewed as a price worth paying given how much of a vote winner the triple lock is likely to be, with retirees the main beneficiaries. The value of the state pension likely to surge past £13,000 by the end of the decade if the triple lock is retained, around £1,500 higher than the 2024 figure.

‘However, the elephant in the room remains exactly what the goal of the triple lock is. Neither the Conservatives nor Labour have ever set out what they believe a fair value for the state pension is or how long people should receive it, preferring instead to blindly stick to a policy they know is popular.

‘This is perhaps understandable ahead of a general election, but at some point, politicians will need to come clean with the public about what the triple lock is trying to achieve and when it will ultimately come to an end.’