State pension triple lock warning as Andy Burnham considers policies | Personal Finance | Finance
The arrival of Andy Burnham into 10 Downing Street could mean more changes on the way for your state pension. Financial experts warn the state pension is under “growing strain” as costs ramp up.
Just a day into the new job, Mr Burnham has already unveiled his first major fiscal policy under new Chancellor, John Healey, who takes over from Rachel Reeves. The Government has announced a VAT cut on electricity bills coming in from October.
Looking at the state pension, the new PM has pledged to stick to the Labour Party’s manifesto from the 2024 General Election, which included keeping the triple lock. But this is a costly commitment for the Government.
‘Considerable strain’
Charlotte Kennedy, chartered financial planner at wealth firm Rathbones, said: “It is no secret that the public finances are under considerable and growing strain, while the cost of providing the state pension continues to balloon.” The triple lock ensures state pension payments tick up each April in line with the highest of three measures.
These are a minimum of 2.5 per cent, the rise in average earnings or inflation. Pensioners have enjoyed some big payments increases in recent years thanks to the policy.
This included a record 10.1 per cent pay rise in April 2023 followed by an 8.5 per cent hike the following year. One way ministers could look to keep the policy affordable is by increasing the age you can start to claim your state pension.
Ms Kennedy said: “Speculation around potential changes to the pension system has intensified, including suggestions that the state pension age could increase more rapidly as part of the ongoing statutory review.” Labour announced in 2025 there would be another review of the state pension age.
The Government has to look at the policy at least once every six years. An independent review of the metric is taking place, which Labour ministers will then consider.
State pension changes under way
The state pension age is currently moving up, increasing in stages from 66 to 67 between April 2026 and April 2028. Another move upwards is on the books, with a transition from 67 to 68 between 2044 and 2046.
But there has been discussion of bringing forward this move. A previous independent review of the state pension age from 2023 suggested bringing forward the move to 68 by three years, to take place between 2041 and 2043.
But a recent report by the Office for Budget Responsibility, which scrutinises the Government’s finances, said it should take place even sooner. The group has recommended the move to 68 should happen from 2037.
