Labour Party set to keep state pension triple lock if elected

The Labour Party is set to include a commitment to the state pension triple lock in its upcoming manifesto, according to reports from The i.

Under the triple lock, the basic state pension rises each year in line with whichever is the highest out of three factors: wage growth, inflation or 2.5 per cent.

The Liberal Democrats became the first UK party to commit to protecting the triple lock in the next parliament last year, with speculation over the Conservative and Labour Party manifestos having persisted in the meantime.

However, according to The i, multiple sources from the party have confirmed that party leader Sir Keir Starmer and shadow Chancellor Rachel Reeves would back the triple lock policy in their election manifesto, which is currently being drafted by officials.

A senior Labour insider told The i that the state pension would have to grow in real terms as Britain’s housing crisis means more people are reaching pension age without the security of owning their own home or having a council tenancy, warning that “there is a tsunami of pensioner poverty heading our way over the next few decades.”

However, AJ Bell’s director of public policy, Tom Selby, said that while it is “no surprise” Labour has decided to commit to the state pension triple-lock, “that does not mean the decision represents good policy”.

“Any politician that advocates maintaining the triple-lock is effectively admitting the state pension is too low,” he said. “But rather than putting in place a plan to increase the value of the state pension to a level deemed ‘fair’, the triple lock randomly ratchets up the state pension in real terms, depending on earnings growth and inflation at a specific point in time each year.

“This approach has proven extremely volatile in recent years as inflation and earnings have spiked, meaning the cost to taxpayers each year has been both significant and unpredictable.

“The triple lock has become a totem for ‘doing right by older people’, but as it increases the cost of the state pension, there is a risk planned rises in the state pension age will need to be accelerated to balance the books, embedding intergenerational unfairness into the system.”

Indeed, concerns over the impact of the rising cost of the state pension have been growing, with research from the Institute for Fiscal Studies (IFS) revealing that the triple lock has already raised state pension spending by around £11bn a year since 2010.

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