{"id":7075525,"date":"2026-10-04T10:42:14","date_gmt":"2026-10-04T10:42:14","guid":{"rendered":"https:\/\/fivemor.com\/?p=7075525"},"modified":"2026-10-04T10:42:14","modified_gmt":"2026-10-04T10:42:14","slug":"weekend-reading-state-pension-to-fall-out-of-lock-step","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=7075525","title":{"rendered":"Weekend reading: State Pension to fall out of lock step"},"content":{"rendered":"


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The first Weekend Reading every month can be read by anyone on the Monevator website. Subscribe<\/a> for free to our email newsletter or become a member<\/a> to ensure you see the rest.<\/em><\/p>\n

I<\/span> thought it notable there wasn\u2019t more pushback in the comments last weekend<\/a>, when I cited a growing consensus that something must be done about the pension triple-lock.<\/p>\n

A few of you raised thoughtful questions, mostly about what really drove the convergence of pension-age income with that of the rest of the population.<\/p>\n

But there were no pitchforks, no curses. No shaking a fist at the unfairness of it all.<\/p>\n

With hindsight, this eerie quiet further suggested that most of us can see the pension triple-lock is fair game \u2013 unsustainable in its current form.<\/p>\n

And sure enough, on Tuesday the Prime Minister pulled the bandaid off.<\/p>\n

The triple lock would be tweaked to reduce its long-run cost, Andy Burnham said, and any savings used to fund later life social care.<\/p>\n

Triple-topped<\/h3>\n

As the BBC recaps<\/a>:<\/p>\n

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The triple lock was introduced in 2010 by the coalition government and designed to ensure the value of the state pension was not overtaken by the increase in the cost of living or the incomes of working people.<\/p>\n

It means the state pension rates rise every April by either inflation, earnings growth or 2.5% \u2013 whichever is the highest.<\/p>\n

Burnham said this will stay in place until 2030, at which point he would like to \u201cadjust it\u201d<\/em>.<\/p>\n

He said: \u201cThe state pension will continue to rise every year at least by prices or 2.5%. And it will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation.<\/em><\/p>\n

But this change will generate significant savings which we will use to build up our national care service.<\/em><\/p>\n

Some may not realise it but older people with nothing more than the state pension, or only a little more, can find themselves paying care charges today from that small income. Under my plan, this will no longer happen.\u201d<\/em><\/p>\n<\/blockquote>\n

On first blush it looks a sensible compromise. I think most people support a reasonable State Pension, if only because we\u2019ll benefit from it ourselves.<\/p>\n

But its \u2018every way\u2019s a winner\u2019 ratchet made the old triple-lock system increasingly unviable. It\u2019s already forecast to cost around three times as much<\/a> by the end of the decade as originally expected.<\/p>\n

Burnham\u2019s tweak should reset the built-in escalation. According to the IFS<\/a>:<\/p>\n

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The new, reformed version of the triple lock still contains three parts.<\/p>\n

Inflation, earnings growth and 2.5% are all important.<\/p>\n

But the new mechanism means that each year the state pension will instead increase by the maximum of:<\/p>\n