By GB News (Politics) | Created at 2025-01-18 00:01:49 | Updated at 2025-01-18 02:49:13
2 hours ago
The state pension triple lock is "not sustainable" in its current form and lacks intergenerational fairness, a leading retirement analyst has warned.
Steven Cameron, the director of Pensions at Aegon, said speculation over reforming the state pension would be "very concerning" to pensioners.
The triple lock ensures the state pension rises annually by whichever is highest of average earnings, inflation, or 2.5 per cent.
"If the triple lock is left as is, over time, state pensioners will get higher increases than average wage growth. That lacks intergenerational fairness and it's not sustainable," Cameron said.
His comments come as debate intensifies over the future of the policy, with both major parties facing scrutiny over their long-term commitment to the measure.
Cameron outlined a potential alternative to the current system, suggesting the introduction of "smoothing" to the triple lock formula.
Under his proposal, pensioners would receive an inflation increase as a minimum, with additional uplifts if wage growth over the previous three years averaged higher than inflation.
"This avoids widely fluctuating outcomes at times when both inflation and earnings growth are unpredictable, smoothing things out but ensuring pensioners still share in sustained increases in the nation's wealth," he explained.
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Analysts are highlighting the state pension is "not sustainable" in its current form
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The pensions expert also suggested reviewing the 2.5 per cent minimum guarantee, noting the broader focus on reducing inflation to two per cent.
He argued that such reforms would make the system more sustainable and predictable, reducing any justification for means testing.
Conservative leader Kemi Badenoch has sparked controversy by suggesting her party would examine means testing for the triple lock.
Speaking on LBC, Badenoch said examining redistribution of funds from those who "do not need it" was "the sort of thing" her party would explore.
She emphasised the need to focus on economic growth, stating: "We've started living off our inheritance, we're living off the work that previous generations did."
"We've got to give something to the next generation. What are we leaving them with? That's what we've got to sort out," Badenoch added.
However, when specifically asked about revisiting the triple lock, Badenoch replied "no", with her party later accusing critics of spreading "fake news".
The Conservative leader has previously advocated for means-testing of Winter Fuel Payments for wealthy pensioners.
Kemi Badenoch is under fire for her comment about state pension means-testing
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Labour seized on Badenoch's comments, claiming the Conservatives had "let the mask slip" and would leave pensioners worse off.
A Labour spokeswoman said: "Badenoch has put pensioners on notice - she's going to cut your state pension."
The opposition highlighted their commitment to a £470 cash boost for pensioners in April, accusing the Conservatives of failing to listen or learn.
However, Chancellor Rachel Reeves has came under fire for means-testing up to £300 in energy bill support for pensioners, provided by the Winter Fuel Payment.
Liberal Democrat Treasury spokeswoman Daisy Cooper joined the criticism, saying: "Bungling Badenoch has finally come up with her first new policy, slashing the state pension."
Cooper called on the Conservatives to "urgently clarify what she meant and how many pensioners would lose out."
Labour has refused to rule out means testing the triple lock, despite criticising Badenoch's comments.
Britons are concerned about the future of the state pension
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When pressed specifically about means testing, the spokesman repeatedly referred back to these commitments without explicitly ruling it out. The debate has intensified following the appointment of Torsten Bell as Labour's new pensions minister.
Bell has previously proposed scrapping the triple lock in favour of a system allowing "short-term deviations", as well as cutting pension tax relief, during his tenure as head of the Resolution Foundation.
Cameron has called for a broader, cross-party discussion on finding a sustainable solution for the state pension.
"While state pensioners should take comfort from the government's commitment to the triple lock for the term of this parliament, its future longer term has to be in question," he said.
"We'd call on the Government and politicians from all parties to step up, and rather than vote scoring, seek a sustainable solution that's fair across the generations," Cameron added.
