Government ‘committed’ to state pension triple lock for 2024 despite criticism – but what happens next?

The prime minister has confirmed the Conservatives will remain loyal to the triple lock guarantee for at least 2024 despite calls for the ‘unfair’ policy to be scrapped. Although, the Conservatives, along with Labour, have not committed to keeping the policy if they win the next election.

The triple lock means the state pension increases each year in line with either the consumer inflation rate, average earnings or 2.5% – whichever is higher. With average earning growth at 8.5%, it is estimated the state pension could rise by over £900 next April, taking the annual total to over £11,500.

It is understood, however, that government officials are looking at using a lower figure for earnings, by stripping out the effect of one-off bonuses given to public sector workers to counter the current high levels of inflation. Such a move could bring the increase figure closer to 7.8% which the government believes is a fairer measure of general earnings growth. Critics state that the move is more about saving money.

Stuart Price, Partner and Actuary at Quantum Advisory, says: “The triple lock guarantee has always been controversial, with arguments that it is too generous and over time has become outdated and should be reevaluated. Despite growing negativity and spiralling costs to uphold, governments have been reluctant to scrap the arrangement due to the potential backlash from retired voters. This is particularly true with an election approaching next year and no party wanting to alienate the grey vote.

“While there is certainly a lack of proportion against workers – many of whom are striking for higher wages – there are pensioners that solely rely on their state pension and maintaining the triple lock in some form will ensure they can cope with the cost of living surge.

“In my opinion, from the comments we are hearing, it is looking highly likely that a review of the arrangement will be carried out by the next government – whoever they are.”