The state pension triple lock is one of the most politically protected — and fiscally expensive — commitments in UK government. Every April, the state pension rises by whichever is highest: CPI inflation, average earnings growth, or 2.5%. Introduced in 2011, it has cost three times more than originally forecast. The OBR says it is unsustainable. The IFS says it will add £80 billion to state pension costs by the 2070s. Yet every government since 2010 has maintained it, and Labour has committed to it for the lifetime of this parliament. This page explains how it works, what it costs, and presents the honest arguments on both sides.
How the Triple Lock Works
Each April, the state pension is increased by the highest of three measures:
1. CPI inflation — measured for the 12 months to the preceding September
2. Average earnings growth — average weekly earnings for the 3 months to July
3. 2.5% — a floor that guarantees a minimum real increase in low-inflation years
The September CPI and July earnings figures are used because the DWP needs time to calculate and announce the uprating before it takes effect in April. The 2.5% floor was a political commitment added to make the triple lock more generous than a simple inflation link — it ensures pensioners always receive some real-terms increase, even in years of deflation or very low inflation.
| Year | CPI (Sep prev yr) | Earnings Growth | 2.5% Floor | Which Won | Increase Applied | New Full Pension/wk |
|---|---|---|---|---|---|---|
| 2016-17 | -0.1% | 2.3% | 2.5% | 2.5% Floor | 2.5% | £119.30 |
| 2017-18 | 1.0% | 2.3% | 2.5% | 2.5% Floor | 2.5% | £122.30 |
| 2018-19 | 3.0% | 2.4% | 2.5% | CPI | 3.0% | £125.95 |
| 2019-20 | 2.4% | 3.9% | 2.5% | Earnings | 3.9% | £129.20 |
| 2020-21 | 1.7% | 3.9% | 2.5% | Earnings | 3.9% | £175.20 |
| 2021-22 | 0.5% | 8.3%* | 2.5% | ⚠️ Suspended | 2.5% (earnings suspended) | £179.60 |
| 2022-23 | 3.1% | 3.5% | 2.5% | Earnings | 3.5% | £185.15 |
| 2023-24 | 10.1% | 6.7% | 2.5% | CPI | 10.1% | £203.85 |
| 2024-25 | 6.7% | 8.5% | 2.5% | Earnings | 8.5% | £221.20 |
| 2025-26 | 1.7% | 4.0% | 2.5% | Earnings | 4.0% | £230.25 |
| 2026-27 | 3.8% | 4.8% | 2.5% | Earnings | 4.8% | £241.30 |
* 2021-22: Earnings suspended because the post-COVID 8.3% figure was distorted by the base effect of mass furloughing in 2020. Government used 2.5% instead. This was controversial — the argument being that it was a genuine earnings rebound pensioners should have shared in.
The Fiscal Cost — What the OBR and IFS Have Said
The triple lock has cost significantly more than originally projected when it was introduced in 2010. The Coalition government estimated a relatively modest cost premium over an earnings link — the actual outcome has been approximately three times that estimate.
The OBR's Fiscal Risks and Sustainability Report stated plainly that "the UK public finances are in a vulnerable position" and that the combination of state pension costs and health spending on an ageing population creates an "unsustainable" long-run position. The triple lock alone accounts for approximately a third of the projected rise in state pension costs between now and 2075.
The IFS calculates that under a more volatile economic environment, the triple lock could cost an extra 1.5% of national income — equivalent to £44 billion in 2025-26 terms — above the central estimate. The range of outcomes is wide: if inflation and earnings are stable, it could cost £40 billion less than projected; if volatile, £44 billion more. This unpredictability itself creates a fiscal planning problem.
The Intergenerational Arithmetic
The triple lock creates a structural transfer of resources from working-age people to pensioners — in a direction and at a rate that no previous generation has experienced. Understanding the demographic context is essential:
In 1980, the ratio of working-age people to pensioners was approximately 4:1. By 2026 it is approximately 3:1. By 2060 it is projected to fall to approximately 2:1. Each working-age person funds an increasing share of the pension bill — not just because there are more pensioners, but because the triple lock ratchets the pension higher relative to wages year after year.
The Intergenerational Foundation calculated that the triple lock increases the state pension relative to average earnings by roughly 0.4 percentage points per year in normal conditions, and much more in volatile years like 2023. Compounded over 50 years, this adds enormously to the pensioner share of national income.
The Case For and Against — Presented Fairly
✅ The Case FOR Keeping the Triple Lock
Pensioner poverty is real. Before the triple lock, pensioner poverty was significantly higher. In the 1990s, one in three pensioners lived in poverty. The triple lock has been one of the most effective anti-poverty policies in a generation for the elderly.
The state pension is still low internationally. At £241 per week (£12,548 per year), the UK state pension is among the least generous in the developed world as a percentage of average earnings. Germany's pension replaces around 48% of pre-retirement earnings; France's around 60%. The UK's replaces roughly 29%. The triple lock is partially correcting decades of underfunding.
Pensioners cannot easily increase their income. A working-age person who falls behind inflation can work harder, seek a pay rise, change jobs, or take on extra work. A pensioner on a fixed income cannot. The triple lock provides insurance against circumstances beyond their control.
The contract was made. People who worked and paid NI for 35 years were promised a certain level of pension. Changing the terms retrospectively is ethically questionable — people cannot go back and save more if the rules change in retirement.
Pensioners vote. About 80% of over-65s vote in UK elections. Removing the triple lock is a political landmine that any government faces — not just a fiscal question. The political economy strongly favours maintaining it.
The 2021 suspension shows it can be adjusted. When the earnings figure was artificially distorted by COVID in 2021, the government suspended the earnings element and used 2.5% instead. The mechanism can be managed — it does not require abolition.
⚠️ The Case AGAINST the Triple Lock
It is fiscally unsustainable. The OBR, IFS, Resolution Foundation, and most independent economists agree the triple lock cannot be maintained indefinitely without either very large tax rises or cuts elsewhere. £15.5bn extra per year by 2030 rising to £80bn+ by the 2070s — on top of an already enormous bill — is not affordable on current fiscal trajectories.
The 2.5% floor is arbitrary and indefensible. Why 2.5%? There is no economic logic for this specific number — it was a political choice to guarantee a minimum increase. It means that in a 0.5% inflation year, pensioners still get a 2.5% real increase — a 2% real gain — while workers on minimum wage may get nothing above inflation.
It is intergenerationally unfair. Working-age people face stagnant real wages, rising housing costs, worse pensions, and higher student debt — while pensioners receive an above-earnings guaranteed increase each year. The Intergenerational Foundation calculates this is the most favourable generation of pensioners relative to workers in UK peacetime history.
The 2022-23 payout was grotesque in scale. The 10.1% increase in 2023 (CPI won) cost approximately £11 billion more than earnings-link alone would have — in a year when working-age people's real wages were falling sharply. The policy transferred billions from poorer workers to pensioners (who are on average wealthier than working-age households in total wealth terms).
Not all pensioners are poor. The average pensioner household wealth in the UK is approximately £302,500 — higher than the average working-age household. Many pensioners own property free and clear and have defined benefit pensions. The triple lock is untargeted — it helps wealthy pensioners as much as poor ones.
It crowds out other spending. Every pound spent on triple lock uprating above earnings is a pound not spent on the NHS, schools, housing or working-age benefits. The opportunity cost is enormous.
Reform Options — What Could Replace the Triple Lock?
Option 1 — Earnings Link Only ("Single Lock")
The state pension rises each year by average earnings growth and nothing else. This is the Beveridge/original model and what most European countries use. It maintains pensioners' relative position vs workers but removes the ratchet effect of the 2.5% floor and the CPI-vs-earnings premium. IFS estimates this saves £15.5bn per year by 2030 vs the current triple lock. The state pension would still grow in real terms when earnings grow above inflation.
Option 2 — Double Lock (CPI or Earnings, No 2.5% Floor)
Remove the 2.5% floor but keep both CPI and earnings as possible uprating measures. Pensioners still get inflation protection and share in earnings growth when earnings do well, but the arbitrary political floor disappears. This is the option that polls best among economists as a compromise — maintaining intent without the ratchet effect.
Option 3 — Smoothed Earnings (Average Over 3-5 Years)
Link the pension to a multi-year average of earnings growth rather than a single year's figure. This avoids the grotesque outcomes of the 2021 suspension (where earnings were artificially high) and the 2022-23 spike — replacing volatile annual swings with a stable long-run earnings link. The IFS has proposed variants of this.
Option 4 — Targeted Triple Lock (For Lower-Income Pensioners Only)
Royal London has proposed keeping the triple lock for those on the old basic state pension (pre-2016 retirees, who are typically older and more likely to be poor) but switching new state pension recipients to an earnings link only. Saves approximately £3bn per year by 2028 rising further — while protecting the most vulnerable pensioners.
Option 5 — Pension Age Increase (Reduce Recipient Count)
Raising the state pension age faster than currently planned reduces the number of recipients rather than the generosity of the benefit. The current timetable is: 66 now, rising to 67 by 2028, rising to 68 by 2046. Accelerating the rise to 68 by 2035 would save approximately £13bn per year. But it is deeply regressive — people in manual occupations with lower life expectancy would lose the most.