The pensions triple lock is one of those policies that – despite only being introduced in 2010 – now feels so deep-rooted that no party can challenge it.
Turn the clock back to the coalition government: conscious of pensioner poverty and the state pension having fallen in real terms over many years, they came up with a guarantee.
Every year it would be either increased in line with prices (CPI inflation), to match average wages, or by 2.5% – whichever was the highest.
This was the post-financial crash era of rock-bottom interest rates and low inflation. Now all that has changed.
The state pension is likely to rise by 8.5% after April, in line with the latest earnings data – including bonuses.
This eclipses inflation which is running at around 7% and forecast to fall.
The average weekly state pension would rise from £203.85 to £221.20 a week.
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Conservative ministers have stuck to the policy in every election manifesto, not least because pensioners turn out to vote.
The British Election Study team in 2018 found that turnout by age ranged from 40% to 50% among the youngest voters and over 80% for the oldest – although it varies by constituency.
The former coalition pensions minister Steve Webb has pointed out that the increase next year will take half a million pensioners over the income tax threshold – giving the Treasury a windfall.
Rishi Sunak, asked on his trip to the G20 about this issue, did not commit to keeping it after the election; although media coverage of this saw Number 10 commit to the policy.
Is widely supported policy unaffordable?
The problem is that it is becoming increasingly unaffordable as working-age people will have to bear the cost of an ageing population’s benefits on their taxes.
The Institute for Fiscal Studies has said that an additional £11bn a year is spent on the state pension due to the triple lock – compared with if it had been raised by either inflation or earnings.
By 2050, they reckon this could be £45bn.
Uncertainty around the triple lock makes it hard for governments to budget exactly how much it will cost in future.
In 2022, it was suspended for one year, for the first time, to take out earnings, because of the distorting effect of people coming back to work after the pandemic.
But despite speculation this might be the moment to reevaluate it, the lock was reinstated for this year with a 10.1% rise in line with inflation the previous September.
Charities for the elderly insist it must stay, saying pensioners on fixed incomes, who have paid taxes all their lives, rely on it to afford their food and energy bills.
And polling across different age groups consistently shows support for it.
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MPs privately admit the need for change
Today the former Tory leader William Hague has waded in on the future of the triple lock.
He said it’s “ultimately unsustainable” and must be looked at again on a cross-party basis, with a future date set to drop the policy.
Describing it in The Times as “a very fierce sleeping dog that hates anyone to tread on its paws” he said younger people faced higher living costs than for decades.
He said one option was to follow the Conservatives’ example in the 1990s, when they gave 15 years’ notice that the women’s pension age would rise in stages from 2010 to 2020 – and Labour went along with it.
MPs across parties privately admit the pension system needs reform.
A senior Tory backbencher said ditching the lock before an election would be an “election killer” and it could only be done a long way into the future with a royal commission to look into it first.
Labour has left some wriggle room too, with the party saying it will set out its policies at the election, but plans to “hold the government’s feet to the fire” on keeping it in this parliament.
The risk in keeping it is that future chancellors bring forward increases in the pension age to save money.
It will reach 67 by 2028 and a decision on when to increase it to 68 has been put on hold.
The problem is there is never a good time for politicians to take the triple lock out of the in-tray.
