DWP could give ‘extra support’ to state pensioners in 1 group | Personal Finance | Finance
State pensioners living in private rented accommodation could receive additional financial support if the Government decides to overhaul or scrap the triple lock, an expert has said. Concerns about the long-term affordability of the triple lock, which guarantees annual state pension increases, were raised during a recent session of the Work and Pensions Committee. Pension specialists told MPs that while the policy has helped boost pension incomes and reduce poverty, it may no longer be sustainable as costs continue to rise.
However, experts warned that identifying an alternative would be difficult because the purpose of the state is “not clear.” The remarks were made during a committee session examining the long-term future of the State Pension age, which currently stands at 66 for both men and women and is scheduled to rise to 67 between April 2026 and April 2028.
The triple lock ensures the State Pension rises each April by whichever is highest of 2.5%, the increase in inflation or average earnings growth. This has led to significant increases in recent years, including a 10.1% rise in April 2023.
However, some experts have said the triple lock is unfair and unsustainable because it drives pension costs up faster than the economy, and gives the same increases to all pensioners regardless of need.
The OBR now estimates that the policy will cost £15.5 billion a year by 2029–30. This is nearly three times higher than the £5.2 billion originally forecast at the time of its implementation.
Jonathan Cribb, deputy director of the Institute for Fiscal Studies, and Chris Curry, director of the Pensions Policy Institute, appeared before the committee.
Mr Cribb told the committee: “Most people agree that the triple lock mechanism is ultimately unsustainable and ultimately a more sustainable mechanism that doesn’t ratchet it up constantly will need to be found.”
He suggested potential changes to the policy, he said: “You could try to move away from the triple lock while providing some additional support for people in the private rented sector. Their housing benefit is not particularly generous.”
He also said that older women who reached state pension age before 2010 are another group that could do with more support.
Mr Cribb said: “There are a set of much older people, such as women who reached State Pension age before 2010 have a massively less generous State Pension on average.
“Trying to address some other inequalities in the system, which you could do if you moved away from the triple lock, because you’d have the Exchequer gain from moving away from the triple lock.”
From 2010 onwards, the State Pension age for women was gradually raised from 60 to 65 to match that of men. This change formed part of wider reforms aimed at creating a single, unified state pension system for both genders.
Under the earlier system, women were able to claim their state pension at a younger age but often received lower payments.
This was largely because many took time away from paid employment to care for children, which reduced their National Insurance contributions.
In addition, married women were previously allowed to pay a lower rate of National Insurance under the married woman’s stamp, resulting in a reduced state pension entitlement later in life.
