Pensioners have been left in the dark over how much they could lose when the triple lock is scrapped, despite ministers claiming the reform will save billions of pounds to fund Andy Burnham’s National Care Service.
Work and pensions minister Torsten Bell was asked to calculate how much less pensioners could receive each year between 2030 and 2040 compared with keeping the existing system.
But when the question was answered this week, he referred MPs back to an earlier response which gave no figures. That response said only that payments vary according to people’s national insurance records and personal circumstances.
Asked how much an individual pensioner could lose cumulatively over the decade, Bell again declined to give an estimate, saying the state pension would still rise every year.
Ministers have also failed to publish a comparison of future pensioner poverty under the new system against keeping the existing triple lock.
Nor have they released the requested sensitivity analysis showing how their poverty projections change under different assumptions.
Instead, they point to projections showing relative pensioner poverty after housing costs falling from around 14 per cent in 2024-25 to around 8 per cent by 2049-50.
The Department for Work and Pensions itself describes those figures as illustrative rather than forecasts.
Pension consultants Hymans Robertson found the state pension could reach £33,500 by 2050 under the adjusted system, instead of a projected £35,100 under the current triple lock (a loss of £1,600 a year). It also found the Government’s projected savings could be halved if economic growth is low.
Calum Cooper, head of pensions policy innovation at Hymans Robertson, warned that “pensioner poverty has not disappeared” and added that the reform would make private pension saving even more important.
New triple lock could see £50bn of savings by 2050
The Government estimates the change could save £15bn a year by 2039-40, rising to £50bn by 2049-50 in cash terms. In today’s prices, that falls to £11bn and £30bn. Its own analysis admits the figures exclude effects on tax receipts and debt interest, and rest on uncertain assumptions about earnings and inflation.
The Resolution Foundation has also found the savings depend heavily on how the economy performs. Its modelling suggests the adjusted lock would have saved nothing in the 1990s or 2000s, but £24bn in the 2010s.
Burnham announced the reform at Labour’s conference last month. He promised to keep the triple lock, which guarantees the state pension rises by whichever is highest of inflation, average wage growth or 2.5 per cent, until the end of this Parliament, and to put the change to voters at the next election.
The savings would fund a new National Care Service, which would be free at the point of use. He has argued it makes no sense to preserve the current lock while so many pensioners face catastrophic care costs.
From April 2030, pensions would rise by the highest of inflation, 2.5 per cent or whatever is needed to hold their value against earnings.
The triple lock was announced by the coalition government in 2010. It was designed to restore the value of the state pension, which had fallen from around 26 per cent of average earnings to 16 per cent by the late 2000s after Margaret Thatcher broke the earnings link in 1980.
Campaigners warn it remains a vital safeguard, and pensioner groups, citing Government figures, say close to a million people eligible for pension credit do not claim it.
Ministers have defended the reform as a way to make the state pension sustainable for future generations.