The future of the State Pension triple lock is being questioned after campaigners argued that scrapping it could save taxpayers up to £19 billion a year within a decade. The influential Intergenerational Foundation (IF) described the long-standing policy as now "unsustainable, unpredictable and unfair" — cautioning it is placing strain on younger workers while delivering blanket increases to wealthier pensioners.
Under the triple lock, the State Pension increases each year by whichever is highest: inflation, wage growth or 2.5% — a commitment introduced in 2011 to enhance retirement incomes. However, new research indicates the cost has ballooned, with expenditure projected to reach £146 billion this year — approximately 5% of GDP — up from £86 billion in 2005-06, representing a nearly 70% real-terms rise.
By the mid-2030s, reforming the system could save £19 billion per year, climbing to £38 billion annually by the mid-2040s, the report suggests. That amounts to almost £1,000 per working household.
What could replace the triple lock?
The IF is calling for a sweeping shake-up of the way pensions are uprated. It proposes that increases should be capped at inflation until 2030-31, before switching to a formula based on the average of inflation and earnings thereafter — a model also backed by the Organisation for Economic Co-operation and Development. The think tank argues this would iron out volatile year-to-year rises while maintaining a connection to living standards.
Crucially, it says the savings should be channelled towards those most in need. A new "Low-Income Pension Supplement" would give Pension Credit claimants an extra £30 a week — or £1,560 a year — from 2026-27, with the payment disregarded in means testing.
Conor Nakkan, senior researcher at IF and author of the report, said: "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." He added: "This report demonstrates how we can reform the triple lock, save taxpayers tens of billions of pounds, and still do more to protect poorer pensioners. The current system is not only fiscally unsustainable. It is also intergenerationally unfair."
Growing strain on public finances
The report cautions that an ageing population will drive costs even higher in the years ahead, placing a greater burden on working-age taxpayers. The report also reveals how expenditure per working-age adult has surged from approximately £3,200 in 2011-12 to £4,100 currently — representing a 28% real-terms increase. Without changes, the triple lock is projected to continue driving escalating pension expenditure, at a time when Britain confronts sluggish growth, elevated debt and overstretched public services.
The IF concludes that immediate action is essential, cautioning that maintaining the existing system risks "leaving younger and future taxpayers shouldering an increasingly heavy burden". The politically contentious triple lock has traditionally been regarded as untouchable, but with costs rising steeply, pressure is intensifying on ministers to reconsider one of the most expensive commitments in the welfare system.
