The state pension triple lock under Labour’s new Pensions Minister who has previously called to “replace” the payment uprate system. Torsten Bell, the MP for Swansea East, has replaced Emma Reynolds in the position after her promotion to City Minister, replacing Tulip Siddiq.
Previously head of Labour policy under former leader Ed Miliband, Bell creating a more “sensible mechanism” in lieu of the triple during his tenure as chief executive of The Resolution Foundation.
Since 2010, the triple lock has guaranteed state pension payment rates increase every year in line with the rate of inflation, average earnings or 2.5 per cent; whichever is highest.
Going into the 2024 General Election, which is when Bell won his seat, Prime Minister Keir Starmer pledged to keep the metric in place to assist pensioners during the cost of living crisis.
However, this latest appointment suggests ministers are open to reforming the state pension with the new minister describing the triple lock as a “messy tool” in ensuring higher payments.
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The latest Labour appointee has previously called for the state pension to be “replaced”
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In a 2020 report, titled “The triple lock on the state pension in light of the coronavirus crisis”, Bell and co-author Laura Gardiner warned the uprating system was not “sensible” in its current form.
Specifically, The Resolution Foundation suggested it would be ideal to replace the triple lock with a “smoothed earnings link”. According to the report, this would keep the link to earnings over the medium term.
At the same time, the think tank’s recommended replacement would safeguard a pension’s value during prolonged periods of subpar earnings growth or hiked inflation in the UK.
Furthermore, The Resolution Foundation has previously highlighted that Department for Work and Pensions (DWP) benefits for working-age people had not kept pace with inflation for years.
Labour has made a new appointment who will oversee pension policy
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Bell wrote: “This outsized growth in the State Penson would take place alongside much slower growth in working-age benefits. The policy answers to these challenges are to replace the triple lock, and pay more attention to the contrast with working-age benefits.
“A minimal and temporary fix would be to operate the triple lock over the coming two years as a whole, so that the state pension would be likely to rise by five per cent (twice 2.5 per cent) over two years (given this should exceed two-year growth in earnings or prices).
“If the Government wants the state pension to continue to rise faster than earnings, it should in addition set a clear objective for the level of the state pension relative to pay – as it does for the National Living Wage – and supplement the ‘smoothed earnings link’ with a fixed additional annual rise until that target value is reached.”
Analysts have questioned the long-term viability of the triple lock due to the rising cost on the taxpayer. Reform how payments are raised has been suggested, as well as raising the state pension age sooner than expected.
According to Government figures, the retirement benefit cost £124billion to maintain for the 2023–2024 tax year, As it stands, the state pension is estimated to cost £137.5billion for 2024-2025.
By 2028–2029, the state pension bill is forecast to reach £158billion. Without intervention, this means that each working-age taxpayer would have to pay £1,200 a year.
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Outside of think tank reports, Bell has also criticised the triple lock on social, writing on X: “There is no possible justification — moral or economic — for treating pensions and working age benefits differently.”
Despite these past statements, LCP partner and former Pensions Minister Sir Steve Webb noted there is a “huge leap between what you say in opposition and what a government can do and might prioritise”.
According to the retirement expert, it is unlikely that immediate reform to the state pension will be rolled out by Labour. The Government has came under fire for its recent decision to means-test Winter Fuel Payments for older households.
GB News has contacted the DWP for comment.
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