Conservative and Labour both pledged to keep the triple lock this Parliament, seeing that as crucial to the pensioner vote. Both will keep their promise.
Abolishing the triple lock does not produce any large early cuts in public spending. If undertaken now the Government Actuary puts it at £2bn by 2030-31.
Abolishing the triple lock in the next Parliament would not yield anything like enough savings to pay for a National Care Service free to users.
Questions those wanting to end the triple lock need to answer
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Would they just remove the 2.5% uprating option, leaving a double lock, or would they only link pensions to prices, or to earnings? Leaving pensions linked to earnings will not yield much saving. No-one is suggesting an end to annual upratings. What is their realistic estimate of five year savings from their proposed change? Mr Burnham’s plan of keeping 2.5% or inflation but also some link to wages needs to be explained more clearly.
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Would they change the law to allow them to remove the £100 bn surplus from the National Insurance Fund which currently pays the pensions, or would they abolish the Fund?
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Would they end the Contributory principle for the pension which awards pension to people who have contributed sufficient in National Insurance, or have earned NI credits?
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Are they aware that the current NI Fund is super solvent and is forecast to generate a surplus in each of the next five years by the Government Actuary?
Background.
The state pensions is the only major “benefit” still based on the Contributory principle. Pensioners therefore see it as an entitlement. Critics complain that it is not backed by an endowment fund like private sector pension schemes. They often ignore the fact that the pensions are paid for out of the National Insurance Fund which is an independent government entity with an annual Actuarial review and certificate of solvency. It is as Pay as you Go scheme with working people paying National Insurance Contributions and pensioners drawing out pensions based on their past contributions. It was set up like this to avoid the first generation having to pay twice, paying for their parents already retired and paying to create an endowment for themselves.
The current legal rules require 24% of National Insurance Contributions to be sent to the NHS, and 76% to be paid into the NI Fund. Every year it is decided if the Fund is in surplus or deficit. If deficit the Treasury has to pay a top up grant. This has not been necessary for the last ten years. If surplus the surplus is held in the Fund and cannot be used for other public spending. The Government Actuary this year forecast a growing surplus for the next five years, to take it above £160 bn. The Fund has to keep a working balance surplus to meet payments with a minimum of 16.7% of annual spend. The Actuary confirmed his 2026 forecasts included allowing for triple lock increases in pensions.
This legal structure could of course be changed. Removing the Contributory principle would not be welcomed by many
September 30, 2026
All prime ministers use advisers (SPADS) and Burnham is no exception. The ex fund manager Jim O’Neil has influence over him. O’Neil is anti-triple lock, as are many commentators who are wealthy enough not to be bothered by it
There are others. Bliar has stuck his oar in favour of scrapping it. Starmer listened to Gordon Brown, who is against.
Just like Reeves breaking the main reason for ISA’s – their tax free status – this may prove to be the thin end of the wedge. Labour will probably announce that capital gains in ISA’s will be taxed next. Then the “double lock” will be reduced to just the 2.5%
Burnham has just outraged the pensioners, the largest demographic in the UK. His victory in the next election cannot now be assured.
September 30, 2026
You think a Labour victory was assured before this arrack on pensions? Hardly!
In his emotion over brain speech which avoided all the main issues he did say one or two truths:-
“So many young people cast adrift by a school system built for some, not all, overly focused on the university route and not enough on technical education. [Blair gave us this]
Should we be really surprised that the numbers of late teens and early 20s on benefits has grown?
Conference, it’s not their fault. It’s ours.” [it is indeed Labour NI grab, employee rights bill, minimum wage increases and doom loop lunacy]
Some one tell the daft Burnham that when council houses were sole off by thatcher they were not lost of destroyed they usually had the same people living in them. Plus the government got paid for them.
ALL THE rest was totally misguided tosh!
September 30, 2026
Burnham’s said in his UN speech that ‘there could be no security without a homogeneous nation’.
Does he know what ‘homogeneous’ means do you think?
PS we MUST repeat that back at him regularly.
September 30, 2026
Perhaps the pensioners can save us from Net Zero by voting for the only Parliamentary Party that says it will scrap it.
The climate crisis hoax would not have been invented by the Left if its “solution”, Net Zero, was not sabotaging our energy and hence destroying our industry and national security.
September 30, 2026
John, Thank you for that very much appreciated detail of the state pension funding situation.
Details matter. Too many of us lack the facts you have outlined. As for Burnham? I am not sure he fully understands what an actuary is, or what their function is. His focus on fiddling with pension detail is annoying when there are so many other more fundamental National issues to deal with as PM,
Let us hope, someone in the Labour administration takes the time and trouble to actually look at the pension pot economics and discovers the facts you have outlined.
September 30, 2026
Rod,
Unlike the general public, I simply cannot believe that senior Politicians are unaware as to how The State pension scheme is really funded, given the huge number of so called experts and advisors who are paid large sums of taxpayer money to know the details of such, BEFORE they give advice.
Many thanks John for outlining the situation, which perhaps like many, I had been previously unaware.
Government (past and present) now seem to have a habit of constantly manipulating figures, to suit a particular argument that they wish to make.
Is it any wonder the Country is now in a downward spiral and financial mess.
September 30, 2026
But he does cry very convincingly, and attracts applause.
We have a representative on the world stage who will cry if any other leader says anything which he finds upsetting. He should have kept Reeves in Nr 11.
They would have been a great Double Act – The Cry Babies.
September 30, 2026
The problem so often with actuaries and with government “experts” in general (Covid Vaccines, energy and Climate Change ones especially) is he who pays the piper (and chooses him) calls the tune.
“The looming diesel shortage is our own fault”. Jacob Rees Mogg video. Well not my fault – but the 40 odd years of dire UK net zero green crap government Jacob.
WILL we get power grid failures and not even any diesel for the emergency hospital generators etc. too this winter?
September 30, 2026
Actuaries deal in figures. Figures are less amenable to emotional massaging.
September 30, 2026
Sir John, you have not mentioned the ‘terms’ of the State Pension at commencement. Introduced in 1948, workers paid 4s 11d a week (22p or about 5% of average salaries). It funded a pension of £67.60 a year for a single person.
Since then the promises and the tax have risen sharply – oh for an NI rate of 5%. With an aging population the future cost will become unsustainable to the then current working generation. Perhaps the Government Actuary should opine on long term (50+ year) funding of state pensions?
September 30, 2026
For the curious, a comparison of 1948 and 2025 (all annualised figures):
1948 Average earnings £298, E’ee+E’er NI £23 (8% earnings), State pen £109 (married couple, 36% sal)
2025 Average earnings £39029, E’ee+E’er NI £7222 (18% earnings), State pen £11973 (single person, 30% sal)
We are paying more than twice as much of our salaries in NI and getting a similar pension! Even allowing for some NI going to fund healthcare it doesn’t feel like things have improved over 77 years.
September 30, 2026
Dominic Frisby concluded that both houses and salaries, valued in gold from the 1950s to date, remain unchanged.
Therefore your statement shows a real terms loss.
October 1, 2026
It’s because the average age of death has increased
September 30, 2026
Thanks John for this excellent summary. As you say, the PM has pledged a double lock of inflation or 2.5%.
The pensions bill is about £150bn, so every 1% increase costs £1.5bn. The difference between the top two current locks is a bit over 1%. That’s all that will be saved by abolition unless government is budgeting for enormous pay rises.
Why the pitch for abolition has been rolled so assiduously is a mystery, as are the claims of savings of £15-22bn. In any case, it will not come close to funding a National Care Service.
September 30, 2026
The government is not only budgeting for enormous pay rises but actually delivering them – over 6% across the public sector last year. This has dragged up the average which includes the lower private sector number so the next pension rise will be based on average earnings.
The Conservatives Sunak/Hunt started this erosion by stating long-term they wanted to abolish NI thus abandoning the contributory principle and opening pensions up to means testing.
September 30, 2026
Is it because they actually want to change the law to get their grubby mitts on the £163 billion. But they can’t say that, so it’s a game of distraction…
September 30, 2026
PM has created a furore but he should have taken a leaf out of the Tories book when they suspended the link to wage growth in 2022/23 because following Covid a rise of nearly 9% in wages was considered too much so they turned it into a ‘double lock’ i.e. circumstances can change. The PM often seems amateurish and his National Care Service appears fanciful as many poorly old people will be looked after by unpaid relatives so the real cost may be many times his estimates and he will have to find all the relevant employees.
October 1, 2026
It’s staggering that after shutting the public economy and NHS down – the corporates and parties continued of course – that wages increased by 9%.
Johnson-the-Destroyer remains the worst of all PMs because his opportunities were golden, created by US.
September 30, 2026
Maybe it should all be linked to growth. Welfare, public sector pay awards, nationalised industries, ngo’s, quango’s, government agencies, councils and the BBC.
That might focus the mind.
September 30, 2026
Perhaps the very generous Defined Pension (based on final salaries) government department employee scheme should be scrapped/modified first, before they start to modify the meagre State pension.
It is now very rare to get a commercial business run such a generous scheme for its employees, as it is completely unaffordable, so perhaps they should look at those figures first.
September 30, 2026
Can I rephrase Labour’s tag line, it should read “Hopeless Again”. This Labour Government is truly dangerous with its intent and direction of travel. All we can hope for is that the market reacts badly to the upcoming budget forcing a General Election.
September 30, 2026
I don’t think Burnham means that abolition of the triple lock would fund a national care service in its entirety. It’s a signalling of political change in emphasis. After all, the Vote Leave bus said let’s fund the NHS from not having to pay our EU annual membership fee ‘instead’, a word which also didn’t mean entirely.
Re ‘some link to wages needs to be made more clear’ I think he’s leaving open the possibility of using the state pension for equality’ purposes – such as the highest current wage earners would have to pay an additional NI premium.
Reply The bus correctly said we would have all that extra money for the NHS, as happened.
September 30, 2026
Those people who are perhaps in their 50s and even late 40s are looking aghast at retirement.
They are mostly becoming aware of an unfunded employment scenario in not so many years ahead.
Lack of job growth, in fact the horror of AI removing them, is causing reflection on private pension funding.
They see all manner of threats to how it will pay out in the future. Now politicians and so-called economists make reduction noises which are certain to mean pensions become the second highest point of discussion during the next GE. There are no prizes for the highest that being immigration in what ever form. Those in favour of state pension increase reduction feel they can go ahead as the oldest of us naturally die away (from voting). It would seem to me to ensure this will be the last so-called Socialist government.
September 30, 2026
While the last 3 years have seen increases in the state pension equivalent to average earnings this has mostly been driven by overly generous increases in civil service pay and minimum wage, it is the exception rather than the rule.
Workers are not protected from inflation in their pay rises, I see no reason why benefits recipients and the state pension should be protected from inflation – all in it together.
Benefits should be increased by average earnings – 1% as they are overly generous at this time.
State pension should be increased by average earnings; not 2.5% nor inflation.
Our Andeh has put up a smokescreen on his electoral reform and rejoining the EU to save very little money. The minimum wage can not continue to increase the way it has for the last few years so average earnings will not feature as part of the calculation in future. Andeh has made a paper promise with little impact as a smokescreen
September 30, 2026
You background paragraph is vey helpful. I remain convinced that inflation should be the measure – it was only the paltry sum awarded by Gordon Brown one year that drove the change. Percentages sometime lead to small outcomes.
September 30, 2026
The comment above should read average earnings and not inflation. Pensioners should be no more protected against inflation than workers.
September 30, 2026
So employer’s NI is contributing to making British industry less competitive so the state pension fund can be in surplus.
Why is it that on this site the usual attitude is privatisation is better than nationalisation, except when it comes to the state pension?
With the Pension Act in full swing, isn’t it time people took responsibility themselves for saving up a pension? Wouldn’t they make a better job of it by competition than government with all its waste?
Time to moderate expectations and put in a plan to retire the state pension. Move everyone over to private pensions and cut the tax burden on employers. Margaret Thatcher was going in the right direction with the opt out. Let’s finish the job.
September 30, 2026
If the NI fund is £100 bn surplus then there is enough money there to allow the triple lock to continue as it means no extra burden for taxpayers – So why are these people making such a fuss about it?
Pensioners are an easy target.
We hear from socialist commentators that pensioners represent the richest group, but that’s only because they have worked to accrue a little wealth, but more importantly most of that wealth is buried within their homes.
It is so typical of the socialist/communist class that they want to take money away from pensioners to help the ‘young’ who are allegedly struggling, so that everyone is equally poor!
Wouldn’t it be better to do something for those who are allegedly poor by improving the economic status of the country? Obviously not, that seems to be beyond them. Labour are incapable of doing the right thing – they must be kicked out of office well before 2029 if we are to survive as a country.
September 30, 2026
The PMs speech seemed far removed from their 2024 election manifesto
September 30, 2026
We can be sure that Labour will remove the contributory requirement so that future taxpayers who work and those of us having enough income to pay income tax in retirement, will have to pay for full state pensions for migrants and scivers who have contributed nothing.
That’s the Labour way, these days, thanks to the extreme left wing opinions of so many of Burnham’s backbenchers and party activists.
September 30, 2026
You won’t often see me type this: I support Burnham !! with his proposal for a National Care System for England. It’s long overdue.
I’m no maestro of government number juggling, but suspect that reducing the pension from a triple lock to a double lock. Will not be providing £18b/year to pay for it.
Just to help our dear PM. Why not scrap the now insulting £10 Christmas bonus that was set in 1972. It must cost more to administrate than it’s worth. It would save government circa. £130,000,000/year
September 30, 2026
You have no concept of the cost of care. Circa £50,000 each pa.
Better to send people to SA where better care is provided by private institutions for £10,000 pa 24/07.
September 30, 2026
Once Labour have removed the requirement to make contributions, the obvious next step will be to remove the universal entitlement and means test it. We can be sure that every £1 of additional income from all sources, say, in excess of the personal allowance, will see a reduction of £1 in the state pension. Anyone currently with income of £25,000 or more will be hit.
September 30, 2026
Most helpful summary. I doubt many MP’s are fully conversant with this fund and its associated rules and objectives? Burnham’s idea of reducing the triple lock to a double lock to pay for elements of social care will not come close to the costs involved. He should not have made this announcement before and until the cost of a properly researched and funded National Social Care Service has been calculated. And why should pensioners have to contribute towards such a service? Today’s State Pension is hardly generous especially considering the cost of living and ever increase energy prices! I suspect the cost of a Social Care Service in say five years time will be astronomical and our country cannot afford it?
September 30, 2026
“The state pensions is the only major “benefit” still based on the Contributory principle”
But not fully delivered for those pensioners who absolutely fully contributed, but chose to live in Australia, New Zealand, Canada and a few other places in the later life!
The priority for spending by this and preceding Governments has been to provide comfortable living, with no contribution, to those illegally arriving to live in the UK.
Where is the justice? !!!!
September 30, 2026
No, we who pay NI also pay for the NHS contribution. So are entitled to care which is seldom forthcoming.
One of my dogs nipped my thumb snatching her pigs ear and the NHS ‘cared for my thumb’ for 3 months, which I nearly lost as a result.
I just took their bandaging off one day and the dog cleaned my thumb obsessively and cured it.
Self sufficiency and help from your friends is good advice when it comes to government institutions.
September 30, 2026
I think the state pension should be a separate payment from the health payment, the health payment should be paid for life, maybe reduced when you get to retirement.
Some countries have a national pension scheme where the state, company and employee pay into a scheme linked to investments and interest on money.
September 30, 2026
“keep the triple lock this Parliament, seeing that as crucial to the pensioner vote”
A policy of buying votes rather than doing what’s right for the public finances. I thought the Conservatives claimed to be the party of fiscal responsibility. Clearly not when it comes to their core voter base.
“Abolishing the triple lock in the next Parliament would not yield anything like enough savings to pay for a National Care Service free to users.”
True, however what was actually said was that the savings would contribute towards paying for it, not pay for it in full.
Given that the current Triple Lock is projected to take pension spend from 5% of GDP today to 8%, changing the policy (something that’s clearly needed if government spending is to be kept under control) is necessary.
It’s a refreshing change to hear a politician say in public what they all admit to in private and be prepared to make a politically difficult choice.
If the Conservative response is to commit to retain the Triple Lock in the long term, they can not be considered a fiscally responsible party as this is a policy where spending on state pensions will reach 20% of all government spending. Add to that pension credit, housing benefit (90% of which goes to pensioners) and NHS spending (which tends to also be weighted towards those of pension age). Can those of us who are working afford the taxes that all of this will cost?
September 30, 2026
There is nothing responsible about targeting one group for the benefit of another – They are cowardly taking the easy option to avoid doing anything about the high cost of the welfare bill.
October 1, 2026
55% of DWP spending goes to pensioners. Recent decades have seen a big transfer of wealth from those of working age to pensioners. Pensioners can’t be exempt from doing their part in keeping the welfare bill under control.
Addressing the working age welfare bill did feature as well.
Reply The state pension is paid for by NI Contributions through a fund. It is not part of DWP benefit spending any more than public sector pensions which are not counted as DWP spending.
September 30, 2026
Peter.
Do you think the State pension should have the protection of the same buying power as in previous years, or less ?
Please bear in mind with current tax thresholds many will be paying tax on any increases soon, if not already.
Incidentally the triple lock does not cover the whole of the old pension scheme payments, (Prior to 2016) only an element of it is protected.
Given the proposed rule change for Private pensions (inheritance tax on death, and income tax on what is left) all on retrospective savings in my case 40 years, I would never advise anyone to save in this way for their old age, as to often the goalposts change.
Those on final salary schemes are very, very fortunate indeed, so fortunate they think they should make the rules for the rest of us who are not as fortunate. !
October 1, 2026
The state pension will still go up by a minimum of 2.5% each year under what is proposed.
October 1, 2026
And if inflation is more than that ?
Then remove 20% for income tax on the increase, given the present annual allowance.
Clearly you wish pensioners to get gradually worse off.
My Wokingham Council tax bill alone at 4.99% increased by more than my State pension this year.
September 30, 2026
If pensions are driven down they will be topped up with claimed benefits.
There is no saving.
October 1, 2026
Nobody is proposing “driving down” pensions. There will still be a minimum 2.5% increase each year.
October 1, 2026
Do you really believe there are pensioners who have seen less than 2.5% increase in all their discretionary spending (food, leisure etc) and all the Public sector forced charges?
What sort of an eyes closed, deaf world do you live in?
September 30, 2026
Despite all the words about if the triple lock will be abolished, it already has been. Last year the usual State Pension was raised by the inflation rate, but some of us higher earners had addition payments deducted. We were assured that were contributing to a higher state pension, but last year our additional entitlements were increased by less than 2%. I expect that this broken promise will continue into the future until the additional payments are worthless.
It also is unfair that the justification for paying the “New”, much higher, pension rates is based on the increased number of qualifying years. Many of us paid national insurance after we had reached entitlement to the full rate, but those contributions also count for nothing.
September 30, 2026
There is an army of people out there, all of them spewing out anti pensioner hatred. These people are at the BBC, ITV, Talk Radio, The Times, The Daily Telegraph and other outlets too numerous to mention.
I paid my NI for 40+ years for the state pension and NHS, and also paid SERPS for a number of years, another hypothecated tax. If governments have wasted/stolen that money, it is for them to refund it.
Let’s have the state pension linked to non-contributory civil service pensions, or better still, abolish the non-contributory civil service pensions and save much more money than abolishing the triple lock will save.
September 30, 2026
+1
September 30, 2026
Why do Labour hate pensioners? Pensions for those who retired before 2016 are hardly generous. Even the higher rate from 2016 won’t make a pensioner wealthy! So what should governments do?
1. End public sector pensions linked to final or average salary; let them be money purchase as well.
2. Drastically cut Government spending.
3. As a result, drastically cut taxation, but make it clear that we are then responsible for our own care costs.
4. Don’t touch the surplus in the current NI fund, because the day will come when it is needed.
5. Stop Immigration completely for 3 to 5 years to remove all those who came illegally, get a handle on how we want to reshape legal immigration and save enough money to keep the triple lock!
September 30, 2026
UK spends only about 5% of GDP on the state pension. This is far below the amount spent by other developed countries around the world.
There is plenty of money there, but UK governments have decided to give more of our taxes to foreigners than to their own people.
September 30, 2026
what’s a few more £billions here or thereRoll the printing press.October 1948 average UK wage £300 p/a.
USA $2650=£665.For the year 2025 UK £39,000 US $62,000=$47,000.Cause and effect?Over the decades the cost
of provision of goods and services in the USA has shown a steady reduction due to COMPETITION and
minimum “big brotherdom”.Over the same period the grim experience here tells a different story.Alas
all indications now point to an even tightening of the screw
September 30, 2026
Like the Labour government’s performative first act of removing the Winter Fuel Allowance, removing the triple lock is a way of punishing those who do not vote for them, and who do not count in the scheme of things, having no Union or massive ethnic ‘minority’ support.
Though actually, despite the general lack of attention unions pay toward anything not directly related to their own financial interests, i thought Sharon Graham showed an admirable sense of fairness in criticizing the labour leadership for trying to dismantle the UK state pension.
September 30, 2026
What kind of Prime Minister stands up at his own party conference and lies through his teeth, deliberately:
he proclaimed, as if he’d just had the message from someone on high who was more adept at spinning deceit.
he tells everyone.
The man is full of hype and dung – it’s clear he has no concept of the dangers of surrendering to the EU, nor the alleged path of Hope he wants to take us down. He is not just a false prophet. Far worse than that he is useless as a PM!
His treachery will reverberate down the ages.
What can we do JR?
October 1, 2026
BH: The PM’s ” more harm than good” with no detail because he’s probably got no idea. Lord John has written & commented & identified clearly the many downsides. Ask A B what he thinks of the Euro, free movement, joint debt, money paid to ‘poorer’ members, money paid to non-EU members under various schemes and enlargement costs for all those states currently in line for future accession, and free movement of course, to name but a few. He’ll be put under pressure to ‘ take advantage of the window of opportunity – as it won’t always be there …’ as stated by ‘ Brussels ‘ some weeks ago when the initial summit was postponed. Let’s see what November brings. A recent article on the Briefings For Britain website worth a read dated 10/9/26 ” The EU Reset is a Sovereignty Trap, Not a Growth Plan”
September 30, 2026
ps:surprisingly there is not a “significant” difference between UK and USA employment % public and private.
The awful difference in economic benefit may safely laid at the feet of productivity and investment.For
certain this lot haven’t got a scooby.
September 30, 2026
Does he use waterproof mascara?
Most worrying of all is Burnham saying “I will fight for what I think is right for the country” this as everything he thinks is “right” for the country is clearly wrong headed & doom loop lunacy. Net Zero, ever higher taxes, ever more red tape, two tier justice, open borders to low skilled migrant and criminal migrants, every more red tape, every more politicians, more EU…
September 30, 2026
LL,
Burnham told The Labour Party Conference:-
“We stop doomscrolling on posts running Britain down. ”
Are ‘doom scrolling’ and ‘doom loop’ linked?
September 30, 2026
Sir John, as there are mutterings from the Lib Dems and now Labour about joining an EU Customs Union & the Single Market, could you do a piece for your blog that explains the costs of doing this the downsides and any advantage (if there is one) to joining these processes?
Reply. Can do this again. It is all downside, no gains.
September 30, 2026
This won’t be the last word, BUT don’t forget whatever the size of annual increase 20% is clawed back via Income Tax.
September 30, 2026
Syrian asylum seeker Ahmad Hania has been charged with the rape of a 15yr old English girl and the sexual assault of her friend. The judge has granted him bail until August 2028. Meanwhile Brits accused of throwing water bottle get no bail.
Make it make sense.
October 2, 2026
A belated comment, this is the first Prime Minister for about 40 years to try to abolish the link between pensions and average earnings. Does he want to be compared to the well-known female PM (1979-90) who did this and created lasting resentment among many over-65s?!
To repair some of the harm, it was in fact the 2010-15 Conservative-Lib.Dem coalition government which created the triple lock. Its implied goal seemed to be to return the purchasing power of the pension to about where it had stood in 1980. Rather modest? The pension lost value substantially vs average earnings between 1980 and 2010. It does not yet seem to have recovered its 1980 value.
40% of pensioners have no other income and the sum raised by this renewed attack (the UK state pension is nearly the lowest in Europe) will not fund more than a tiny fraction of what a national care service would need. So what was/is the point? As the proposal was not in the 2024 Lab. manifest, it is open to the Lords to point out these deficiencies and ensure that at least the changes are deferred until beyond the 2028/9 election.
They could then be put into the manifesto of any party which thinks they make sense. There seems to be only one party which supports them. Its members are probably not even aware of the above inconsistencies, nor of how little money 40% of pensioners have to live on.
Reply Both conservatives and Reform support the triple lock.