Figures released on Tuesday morning from the Office for National Statistics show the number of people claiming the state pension is projected to rise by 1.7 million between mid-2022 and mid-2032, with 13.7m people claiming the benefit by the end of that period.
When it was introduced in 2011 it was expected to cost around £50m a year. But with the advantage of the triple lock, the value of the state pension has skyrocketed, rising by 10.1 per cent in 2023, and by 8.5 per cent in 2024. Around half of the UK’s current benefits bill is spent on the state pension, which cost £110.5 billion between 2022 and 2023, expected to rise to £124bn from 2023 to 2024. It’s time for MPs to say the quiet bit out loud: the triple lock is no longer affordable.
The state pension has risen by about 60 per cent in cash terms since 2010, compared with 40 per cent for average earnings. Protecting the spending power of the elderly on fixed incomes made sense in an age where many relied solely on state pensions. Nowadays the average retiree has assets worth around £350,000 and many are mortgage free. There has also been an uptick in take up of private pensions, although given most private pensions are under pressure from inflation, the Government will almost certainly have to act as the backstop in future.
Rachel Reeves needs to cut pensions, not benefits
Read MoreHowever, concerned by the dump truck of political manure that’s poised ready to land on anyone who dares question the sanctity of the triple lock, most MPs won’t go on the record.
“They could either increase the retirement age, increase tax or take more debt. Every year the Government can encourage a worker to stay in work and in good health benefits the economy. It might be time for a nanny state on steroids to increase preventative medicine and stop people from retiring until as late as possible. A healthier population works more, volunteers more and spends more,” he added.
But one Tory MP, speaking privately, said the answer could be to break the link with earnings altogether.
On Wednesday, Chancellor Rachel Reeves will make a keynote speech about economic growth. Younger workers have suffered the worst from weak growth over the last 10 years. What you won’t hear her saying is the triple lock is unsustainable for the future.
Reeves has guaranteed the triple lock until the next election. Tory leader Kemi Badenoch got into trouble when she mused about it out loud. Don’t expect politicians to voice their concerns. Not in public at least.
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