I know this is an unpopular opinion, but I love the triple lock. It helps prevent poverty and increases our State Pension, which currently provides less relative to earnings than most European systems. Before the triple lock was introduced, the basic State Pension had dropped to around 16% of average full-time earnings. There was a reason for restoring the earnings link; pensioners should share in rising living standards.
We were waiting for the Pensions Commission’s recommendations to help establish how much the State Pension should provide, so that we could know how much to aim for with private pensions. These decisions belong together. Until we know what foundation the state will provide, how can we decide how much people need to save on top?
The consequences of lower increases will be most serious for those with little else to fall back on. Over 2022/23 to 2024/25, state benefits, including the State Pension, provided 88% of income for single pensioners in the lowest income fifth, and 79% for pensioner couples in the lowest fifth. Older single women are particularly exposed because they have less private pension income to draw on.
Pension Credit will protect some people, but it is means-tested and unclaimed by many who are entitled. Only 62% of those entitled received it in 2023/24. It would not protect people just above the threshold or replace the security of an entitlement that does not depend on a means test.
Relative pensioner poverty rose from 13% in 2011/12 to 16% in 2022/23, around 300,000 more people. The latest government analysis puts it at around 14% in 2024/25. PPI modelling published in 2018 found that an earnings link rather than the triple lock could leave around 700,000 additional pensioners in poverty by 2050.
Until the Pensions Commission has set out what level of State Pension is needed, abandoning the triple lock risks reducing the foundation on which pensioners depend.
Pensions Goth
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