Time to unlock: Why it’s time to reform the triple lock on the State Pension
The triple lock ensures that the weekly rate of the State Pension increases each year by the highest of average earnings growth, inflation, or 2.5 per cent. When it was introduced in 2011, it was originally intended to modestly improve the adequacy of retirement incomes.
This report examines the impact of the triple lock on State Pension rates and overall spending. It shows that the policy has significantly increased both. Looking ahead, the triple lock is also expected to remain the main driver of higher State Pension spending.
Our conclusion is that the triple lock needs to be reformed. It is unsustainable, unpredictable, and intergenerationally unfair. At a time when the UK faces large budget deficits, rising public debt, low growth, and stretched public services, the triple lock is simply no longer affordable or fair.
The report also outlines several reform options that would place the State Pension system on a fairer and more sustainable footing over the medium to long term. The savings from reform could help reduce the deficit, while also strengthening targeted support for poorer pensioners.
Key findings
- In 2025–26, the State Pension is projected to cost £146 billion, equivalent to around 5 per cent of GDP. In 2005–06, spending stood at £86 billion. Over this period, the cost of the State Pension has increased by almost 70 per cent in real terms.
- In 2025–26, the full basic State Pension is between £6 and £24 per week higher than under the main alternative uprating mechanisms. The full new State Pension is between £5 and £22 per week higher.
- State Pension expenditure has risen from £108 billion in 2011–12 to £146 billion in 2025–26. Had alternative uprating mechanisms been in place since 2011-12, spending in 2025–26 would be around £132 billion under inflation-only uprating, £135 billion under the average of inflation and earnings, £138 billion under earnings-only uprating, and £143 billion under a double lock.
- In 2011–12, the government spent around £3,200 per working-age adult on the State Pension. By 2025-26, this had risen to around £4,100, a 28 per cent real-terms increase.
Recommendations
IF recommends replacing the triple lock with a more stable and sustainable uprating mechanism. Our preferred reform is to cap State Pension increases at inflation until 2030–31. The State Pension would then increase each year by the average of inflation and earnings.
- This is the most balanced reform option. It would generate substantial long term savings, reduce the volatility associated with the triple lock, while also preserving a link between pension uprating and broader improvements in living standards. It has also been recommended by the OECD.
- This reform would deliver significant fiscal savings over time. We estimate that it would save around £19 billion per year by 2035–36, £28.5 billion by 2040–41, and £38 billion per year by 2045–46.
- Some of the savings should be redistributed to the poorest pensioners. We propose a new Low-Income Pension Supplement for households receiving Pension Credit, worth £30 a week (£1,560 per year) in 2026–27. This would deliver a clear and targeted boost to poorer pensioners, while still absorbing only a modest share of the total savings. By the mid-2030s, the cost would amount to only around 10 per cent of the savings from our preferred reform.