“Scrap the Triple Lock Now” Says IFS Chief – What It Means for Your Pension

The state pension triple lock should be abolished “as soon as possible”, according to the Institute for Fiscal Studies (IFS), as the policy threatens to cost taxpayers £45bn a year by 2050.

Key Takeaways: The Triple Lock Debate

✅ What is the triple lock?
Guarantees yearly state pension increases by the highest of:

• Inflation (CPI)

• Average earnings growth

• 2.5% minimum

✅ Current costs & projections

• Adds £11bn/year to public spending

• Could hit £45bn/year by 2050 (IFS estimate)

• State pension bill: £145.6bn in 2025/26

✅ Labour’s stance

• Pledged to keep triple lock until 2029

• But faces £22bn fiscal black hole

Why the IFS Says It’s Unsustainable

Paul Johnson (outgoing IFS director) warns:

“The triple lock can’t go on forever. We should cap pensions at 33% of median earnings, then switch to a smoothed earnings link.”

Proposed Alternatives to the Triple Lock

Will the Triple Lock Be Scrapped?

• Political risks: Isle of Man reversed its double lock plan after backlash

• Labour’s dilemma: Must choose between pensioner votes and economic reality

• Tax relief fears: IFS warns against cutting pension tax breaks for workers

What Happens Next?

🔹 If triple lock stays: Pensions keep outpacing wages, straining public finances
🔹 If reformed: Could save £22bn+, but risk alienating older voters

Torsten Bell (Pensions Minister):

“A smoothed earnings link could save 0.5% of GDP by 2040s – half the cost of current plans.”

What Should Savers Do?

• Check your state pension forecast (Gov.uk tool)

• Boost private pensions – Tax relief may not last forever

• Prepare for changes – Future governments will reform pensions

#Pension #TripleLock #StatePension #UKFinance #IFS #Retirement #TaxRelief #LabourGovernment

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