“At an absolute level, the state pension is obviously low,” Waters says. “For 2023-24, the new state pension pays £10,600 a year. This compares to £12,800 a year as the minimum retirement living standard income advocated by the [Pensions and Lifetime Savings Association].
“Today, the triple lock is serving an important role in addressing the inadequacy of our state pension, albeit slowly, by annual uplifts above other associated increases. But this is not by design, to address any clearly articulated policy goal,” he continues.
“If any review is needed, it is one that determines what the long-term state pension income should be, and how we fund that.”
Quilter head of retirement policy Jon Greer says the turbulence of the past few years has seen the triple lock draw increasingly heavy criticism, particularly from those whose real-terms wages have struggled to keep up.
“The narrative around the triple lock often mixes with broader discussions on the appropriate level of state pension vis-à-vis mean full-time earnings," he says.
“Ultimately, there needs to be a cross-party consensus on what the level of the state pension should be relative to mean full-time earnings, without a target for what the triple lock is aiming for — it is a policy with no destination.
“Separately, once the level of the state pension is agreed, its real value relative to earnings should be maintained — a system that, for example, is in place in Australia,” Greer continues.
“We need to find a better outcome than the constant uncertainty the current situation provides. It’s entirely unhelpful that the state pension is turned into a generational divide.”
Baroness Ros Altmann a former pensions minister, adds that reform of the triple lock is overdue and that it could ensure better protection for the poorest.
“There are two aspects of the triple lock that make no sense in social policy terms. First, the 2.5 per cent part has no economic relevance,” she says.
“If inflation and earnings growth are only 1 per cent, why should state pensions rise by 2.5 per cent?”
In 2021, for example, the state pension was uprated by 2.5 per cent, more than double the rate of either the consumer price index (0.5 per cent) or average earnings (minus 1 per cent). Likewise in 2015, the state pension was uprated by 2.5 per cent, more than double the rate of CPI (1.2 per cent) and average earnings (0.6 per cent).
“The triple lock does not actually protect the poorest and oldest pensioners because it is not applied to pension credit,” Altmann adds.
“A proper pension protection policy would provide the best protection to the pensioners who need it most, but the triple lock does not.”
