Prime Minister Andy Burnham has announced that legislation will be introduced in this parliament to scrap the state pension triple lock, despite the current guarantee remaining in place until 2030. The government stated that MPs will vote on these changes before the next election.
The policy, which ensures the state pension increases by the highest of 2.5%, inflation, or earnings growth, will see its earnings element adjusted. This aims to prevent significant pension increases in years with high wage growth.
Burnham confirmed in his conference speech that the triple lock would remain until 2030, fulfilling a Labour manifesto promise. However, government guidance indicates an intention to legislate sooner. The government estimates these adjustments could reduce state pension spending by £15bn a year by the end of the 2030s and by £50bn a year by 2050. The Resolution Foundation thinktank noted the difficulty in estimating savings, with figures varying from nothing to £24bn annually depending on the economic model used.
Burnham stated that savings from these changes would fund a national care service in England, free at the point of use, and also pledged to exempt lower-income pensioners from income tax during this parliament. Polling by YouGov suggests 48% of voters support Burnham's plan, while 28% oppose it.