How would removal of the State Pension triple lock affect adequacy?
In 2011, the Coalition Government introduced the “triple lock” mechanism which uprates the new State Pension (nSP) and the basic State Pension (bSP) every year by the greater of the rise in earnings, the rise in the Consumer Price Index (CPI) or 2.5%. There have been concerns about the sustainability of the triple lock and calls for it to be replaced, though the Government has committed to retaining the triple lock during the current Parliament. Removal of the triple lock would decrease the cost of providing State Pensions, however it would also have implications for pensioner poverty and the amount spent on other means-tested benefits such as Housing Benefit, caring credits and disability premiums.
This report was sponsored by the Centre for Ageing Better, Age UK and TUC. It explores the potential effect of changing State Pension indexation on poverty, adequacy and state spending, and examines the future outlook for State Pension policy as a whole.
Chapter one sets out historical indexation arrangements and explores their impact on the real value of State Pension income.Chapter two
looks at the role of the State Pension in providing adequacy and explores how adequacy is measured.Chapter three
explores the costs of the triple lock and how changes to indexation could affect people with different characteristics.Chapter four
analyses the impact of different indexation scenarios on State spending, pensioner poverty and adequacy.Chapter five
discusses the role of the State Pension going forward.
To download the report, please click here.
To download a write up of the launch event, please click here.
To download the presentation from the launch event, please click here.
Keywords: State pension, basic state pension, new state pension, state, triple lock, indexation, double lock, poverty, means-tested benefits, Housing Benefit, disability, adequacy, sustainability, earnings, consumer price index, CPI, retail price index, RPI, bsp, nsp, double lock, flat rate,