The Tony Blair Institute has recommended the removal of the state pension triple lock policy. This policy ensures that the state pension increases annually based on the highest value among earnings growth, inflation, or a minimum of 2.5%.

Initially introduced in 2010 by the coalition Government and active since the 2011/12 financial year, the state pension saw a 4.8% increase this year due to wage growth. The Tony Blair Institute (TBI) argued that the current state pension system is outdated, unsustainable, and not adaptable to modern work and lifestyle patterns.

The TBI proposed the establishment of a “lifespan fund” that accumulates up to 20 years of entitlement through various activities like work, caregiving, and education. This fund would also allow individuals to access funds earlier in life, with automatic enrollment into higher National Insurance contributions upon rejoining the workforce.

Tom Smith, TBI’s director of economic policy, emphasized the need for reform, stating that the triple lock policy must be discontinued after the upcoming election. The report forecasts a significant increase in the number of pensioners by 2070 and projects a rise in state pension spending from 5% to 7.8% of GDP under the current system.

The TBI estimates that implementing their proposed model would maintain long-term state pension spending at around 5.5% of GDP, preventing approximately £66 billion in additional costs by 2070. Caroline Abrahams from Age UK advocated for retaining the triple lock, citing its positive impact on vulnerable pensioners.

Amid differing opinions, the Department for Work and Pensions (DWP) reaffirmed its commitment to the triple lock until the end of the current Parliament. The DWP highlighted ongoing efforts to secure retirements for future pensioners, including the examination of various support options such as universal credit and means-tested benefits.