Why Burnham is unwinding the UK's 'triple lock' state pension pledge
EWU•British Prime Minister Andy Burnham pledged to replace the state pension triple lock from April 2030, if Labour wins the next election. Labour says the change could save £15 billion a year by the end of the 2030s and £50 billion a year by 2050, with savings helping fund a National Care Service.
1. How the system would change
The triple lock, introduced in 2011, raises state pensions each year by the highest of inflation, average earnings or 2.5%. From 2030, Burnham said pensions would rise by at least inflation or 2.5% and maintain their value relative to earnings over time.
2. Projected savings
Labour said the reform would save £15 billion annually by the end of the 2030s, rising to £50 billion a year by 2050. The Institute for Fiscal Studies said initial savings were likely to be much smaller and difficult to predict, though they would compound. It estimated that if the proposed reform had been in force since 2011, state pension spending would now be £9 billion lower.
3. Political response
A poll conducted before Burnham's speech found 53% supported keeping the triple lock and 13% supported ending it. Burnham said low-income pensioners would not pay income tax during the current parliament. The IFS said pension reform savings alone would not be enough to fund the proposed care service.
