The Conservative-Liberal Democrat coalition government introduced the Triple Lock in 2011, and it has remained a steadfast mechanism for 14 years.
However, some experts believe its days are numbered. Kemi Badenoch this week suggested she may subject pensions to further means testing.
Mrs Badenoch came under fire on Thursday after suggesting she would look at means testing when asked about the future of the triple lock, which is aimed at preventing the state pension’s worth from being eaten away by inflation and other cost pressures.
David Piltz, CEO at Gallagher’s Employee Benefits & HR Consulting Division in the UK, told Reach: “The triple lock is fixed in place for now, but in the future, to maintain a high rate of increase, solutions like further boosting workplace pension savings through automatic enrolment or making tough fiscal decisions will be necessary.”
The annual rise in state pension will boost the income of retirees across the country in April by more than £470.
This marks a staggering 4.1% rise while other benefits will see a meagre 1.7% jump that’s currently almost a full 1% below inflation.
The annual increases have such a vast difference because of the Triple Lock mechanism. This policy promises to uprate state pension payments by the highest figure between inflation, wage growth and 2.5%.
During Chancellor Rachel Reeves’ first budget, she confirmed the 2025 rise would be tied to the 4.1% wage growth experienced in the UK. David concluded: “Last year, the government confirmed that the full New State Pension would rise to £230.25 per week from April 2025 – an annual increase of £470.
“While this announcement may be welcome news to those receiving the State Pension or approaching State Pension age, the reality is that the triple lock is not sustainable in its current form.”
A proposal to make the triple lock means-tested due to this “double-bind” has had a lukewarm reception. Tory party leader Kemi Badenoch appeared on LBC, stating that her party would “look at means-testing” benefits, without specifying which ones.
This sparked concern and backlash, with some claiming she was threatening to means-test the state pension and triple lock.
However, according to the transcript, Badenoch actually stated that starting with the triple lock was not the solution, and instead emphasized the need to address the underlying issue of decreased revenue, saying: “Starting with the triple lock is not how to solve the problem. We need to start with why are we not making the same kind of money we used to make?
“We’ve started living off our inheritance, we’re living off the work that previous generations did. We’ve got to give something to the next generation. What are we leaving them with? That’s what we’ve got to sort out.”
