Triple lock has given OAPs a £1,200-a-year income boost report shows, but report finds ministers could face ‘insurmountable pressure’ to raise the state pension age even faster
- Mechanism could mean the state pension will rise by a further eight per cent
The pension triple lock has boosted older people’s incomes by more than £1,200 a year, a report shows.
The Institute for Fiscal Studies found that the new state pension is worth £24 a week more than it would have been under the system left behind by the last Labour government – equal to £1,248 a year.
But the study warns that the soaring cost could put ‘insurmountable pressure’ on ministers to raise the state pension age even faster.
The Treasury is braced for earnings figures next week that could boost the state pension by a further 8 per cent, adding £3billion to the annual bill.
The triple lock was introduced by the coalition government in 2010 to protect the value of the state pension, following rises of as little as 75p a week under Labour. This means it is guaranteed to rise in line with either earnings or inflation or 2.5 per cent, whichever is the highest.
The IFS said the state pension was equal to roughly 25 per cent of average earnings for the first time since 1980.
Report author Heidi Karjalainen said: ‘A real risk is that retaining the triple lock for too long increases state spending so significantly that it leads to insurmountable pressure for a much higher state pension age.
‘This would particularly affect people with poorer health, who struggle to remain in employment until they reach state pension age.’
Downing Street this week said there were ‘no plans’ to change the system.
