Top News

Reforming the pensions triple lock could save billions year on year by the mid 2030s, a think tank has claimed. The guarantee - introduced in 2011 - ensures that the state pension will rise in line with inflation, average wage growth, or 2.5%, whichever is highest.

Pensioners are £1,300 a year better off than they would have been had the state pension risen in line with inflation over the past decade. Critics are now calling for the government to change the triple lock plan, with some outlining the rising cost has become unaffordable.

The Intergenerational Foundation has outlined a possible solution should the government take action against the triple lock. Costs were seen to have risen 70% in real terms in the past 20 years, with The IF is suggesting a "double lock" strategy in an "independent call for evidence" released by the charity.

The Intergenerational Foundation, an independent charity, has called on pensions to increase with inflation until 2030. From 2031 onwards, pensions would increase on an average of inflation and wage growth, saving £19billion a year by 2035, the charity has claimed.

Further savings of £28.5billion a year could be met from 2040, and by 2045, The Intergenerational Foundation believes reformations to the pension system could see savings of £38billion a year.

Savings made by the pension reformation could be given to lower-income pensioners with a pension supplement of £30 a week suggested. Further details given by the charity outline the boost should be used to top up a pensioners income to £238 a week if they are single or £363.25 if they have a partner.

Longer term projections highlight state benefit expenditure will be almost 100% higher than it is now by 2085. The Government Actuary's 2020 Quinquennial Review estimates that, without policy changes, state pension benefit expenditure in 2085 will be 88% higher in real terms than in 2020.

Conor Nakkan from the foundation told The Times: "The triple lock may have been introduced with good intentions but it has become an expensive and poorly targeted policy. It now delivers large increases to all pensioners including millions who are already well-off while younger generations face stagnant living standards, high housing costs and a growing tax burden."

Tom Selby from the investment platform AJ Bell said the longer the triple lock stayed, the more likely it was that the state pension age would rise further and faster.