“Political necessity has once again trumped long-term thinking when it comes to the state pension triple-lock. The policy has simply become a symbol for doing right by older people, and as a result there has been little serious debate over its purpose or sustainability.
“The reality is the triple-lock is a random mechanism for ratcheting up the value of the state pension during periods of low inflation and average wages, without any clear destination or justification. Indeed, moving to a double-lock of earnings or inflation is unlikely to cost a lot less in the short-term – and could cost nothing at all if either remains above 2.5% between now and 2022.
“The state pension system will come crashing down unless spending is reigned in, with estimates suggesting it will cost £30bn more in today’s terms in 50 years’ time unless reforms are introduced. This will involve either reducing the amount people receive, or increasing the state pension age. Neither of these reforms will be popular but if politicians refuse to address this reality they will risk further piling the burden on future generations.”
View the announcement here.