The triple lock policy ensures state pension payments increase each year, in line with the highest of 2.5 percent, the rise in average earnings or inflation. Many analysts have warned the policy may only last for a few more years as the increases become unsustainable for the public purse.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said the policy will need to be reviewed as part of a larger conversation about older Britons’ work and income.
She spoke after John Cridland, who previously reviewed the state pension age in 2017, appeared before the Work and Pensions Committee today.
Ms Morrissey said the cost of the state pension is “enormous and growing”, putting pressure on ministers to change the metric for the annual increase or to bring forward the state pension age increase.
She explained: “In Cridland’s review of state pension age in 2017, he said there would come a point where the triple lock had done its job in raising state pension but that its continued existence would become unfair on younger taxpayers and force further increases in state pension age– has this tipping point been reached?
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The increase to 67 is set to take place in stages by 2028 while the move to 68 will take place gradually between 2044 and 2046.
Another review is to be published this year into the state pension age with many expecting the age increase to be brought forward.
Ms Morrissey also said older workers shouldn’t be forced to leave the workforce because they have responsibilities such as caring for a loved one.
She commented: “By exiting the workforce employers are missing out on enormous experience that could be used to mentor younger workers and pass information on, whereas redesigning roles and allowing more flexibility could keep this experience in the workforce.
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“It’s an enormous shift for employers that Cridland compared to having to consider policies around maternity and paternity leave and pay and it’s one that should be grasped sooner rather than later.”
With the 10.1 percent increase this April, the full basic state pension will increase from £141.85 a week to £156.20 a week.
Those on the full new state pension will see their payments increase from £185.15 a week to £203.85 a week.
People typically need 30 years of National Insurance contributions to get the full basic state pension and 35 years of contributions to get the full new state pension.
A person can check their state pension entitlement using the state pension forecast tool on the Government website.
The tool will also tell a person if they can pay contributions to fill any gaps in their National Insurance record.
A woman appeared on the Martin Lewis Money Show on ITV last night, who topped up her state pension by £1,000 and is on track to get an extra £11,500 in state pension payments over the course of her retirement.
Mr Lewis encouraged anyone aged 45 to 70 to check if they have any gaps in their record and if they would benefit from paying contributions.
