The Triple Lock
Jul. 7th, 2026 08:41 amI want to write something on this because it's been in the news lately, and people have been misunderstanding me on social media. Which is a little awkward as some of my friends are of pension age. There's nothing new here for people who have been paying attention.
For non-British friends: "The triple lock" is a policy device that's been around for about 14 years which says that every year the state pension will rise by one of (a) the rise in average wages; (b) the rate of inflation; or (c) 2.5%, whichever is the greatest.
This is mathematically unsustainable. It means that when the economy improves, wages rise, and the pension rises... and when the economy gets worse, inflation rises, and the pension rises. And if neither happens, the pension rises anyway by 2.5%. It's a one-way ratchet that means that for so long as it exists, the state pension will continue to rise compared to average earnings. At some point - given that tax income is very loosely related to average earnings - that will obviously be unaffordable.
This is not me saying that the state pension is too generous; I don't know enough about that to have a clear opinion about it. It is me saying that at some point, the triple lock will have to go - no matter how politically difficult that may be.
For non-British friends: "The triple lock" is a policy device that's been around for about 14 years which says that every year the state pension will rise by one of (a) the rise in average wages; (b) the rate of inflation; or (c) 2.5%, whichever is the greatest.
This is mathematically unsustainable. It means that when the economy improves, wages rise, and the pension rises... and when the economy gets worse, inflation rises, and the pension rises. And if neither happens, the pension rises anyway by 2.5%. It's a one-way ratchet that means that for so long as it exists, the state pension will continue to rise compared to average earnings. At some point - given that tax income is very loosely related to average earnings - that will obviously be unaffordable.
This is not me saying that the state pension is too generous; I don't know enough about that to have a clear opinion about it. It is me saying that at some point, the triple lock will have to go - no matter how politically difficult that may be.

