Triple lock pension ‘disaster’ warning over ‘pulling plug’ | Personal Finance | Finance

Millions of Brits face a bleak retirement future if ministers scrap the pensions triple lock, former pensions minister Sir Steve Webb has warned.

Writing in a stark intervention, the ex-Liberal Democrat MP and minister said ending the guarantee would amount to “pulling the rug” from under pensioners and trigger a “retirement disaster” for future generations. The triple lock – which ensures the state pension rises each year by whichever is highest out of inflation, wage growth or 2.5% – has come under mounting pressure amid concerns over the soaring cost to taxpayers.

Economists and think tanks have increasingly questioned whether the policy is sustainable, with critics branding it unfair on younger workers struggling with higher taxes and housing costs.

But Sir Steve said abolishing the policy now would leave millions dangerously exposed because Britain’s private pension system is failing to provide enough retirement income. He warned that the decline of traditional final salary pensions has left many workers dependent on the state pension, while newer workplace pension schemes introduced undEr auto-enrolment have not yet had time to build up meaningful savings pots.

Sir Steve, who was writing in the Telegraph, said official Government figures already show around 14.5 million people are on course for a poorer standard of living in retirement compared with their working years. But he claimed the outlook would deteriorate dramatically if the triple lock were watered down.

According to figures obtained through a Freedom of Information request to the Department for Work and Pensions, replacing the triple lock with an earnings-only link would push the number facing a retirement income shortfall up by more than four million to 19 million people.

Linking pensions only to inflation would be even worse, with as many as 26 million people – more than three-quarters of the working-age population – potentially falling short in retirement, he said.

Sir Steve wrote: “The triple lock cannot continue forever. But, for the coming decade at the very least, millions of people are set to reach retirement heavily dependent on the state pension because of our slow progress in building up a new private pension system.”

He added: “We simply cannot pull the rug from beneath them by watering down the vital support provided by the state pension, uprated by the triple lock.”

The warning comes as the cost of the state pension continues to rise sharply. Under the current system, the full new state pension rose by 4.1% in April, taking payments to £230.25 a week – worth almost £12,000 a year.

Chancellor Rachel Reeves has repeatedly pledged to maintain the triple lock during this Parliament, despite growing concern among Treasury officials over long-term affordability.

Campaigners for older people argue the policy remains essential after years in which the state pension lagged behind earnings growth and living costs.