The Telegraph published an article attacking my defence of the state pension and triple lock. This is a policy all the main political parties support. I wrote an article in reply which they did put on their website but not in the paper. Mr Lawson published a reply. When I asked to respond I was only allowed a letter which briefly appeared on line.
I am running my last letter here addressed in this version to all who want change in the pension . Those who want to change the pension need to understand the current system and tell us how they would change the law to cut its cost. Of course a government with a majority can change the law and take money out of the National Insurance Fund, but it does require contentious legislation which so far no party has advocated.
Letter:
Some want to remove the triple lock from the state pension. It would be good if they would answer a few questions about the changes they want to the current system.
How would they uprate pensions annually, or do they want them to be unprotected against inflation? How much do they want to save by legislating for lower increases or no increases?
Do they wish to repeal the contributory basis of the current pension scheme? Do they think it should become a non contributory benefit for anyone over pension age? Current law says you pay in during your working years to qualify.
Do they wish to abolish the National Insurance Fund which pays for the pension? Do they wish to change the law to allow transfer of the large and growing surplus to cover some other spending?
Do they see that under current law the pension is the one benefit which is covered by specified revenue and protected by Actuarial reports on the solvency of the Fund?
September 22, 2026
There is an assumption that the Boomer generation had a windfall in the increased value of their homes.
Dominic Frisby has valued British homes and wages in gold, dating from 1950.
As a result it transpires that house prices and wages have NOT increased at all.
It was just as difficult for the Boomers as for subsequent generations, to obtain capital and assets. To steal their very expensive pensions (for I believe pension payouts v pension contributions valued in gold will show loss) is an unnecessarily vicious attack on our own relationship at a time when we are spending tens of billions on fraudulent asylum seekers etc.
September 22, 2026
Indeed, but of course property should be a far better investment than gold as you get all those years of rents to accumulate and reinvest (or free living accomodation for you) whereas with gold you have insurance and storage costs.
The big problem with property is it is all too easy for government to tax it to death (even on profits you have not made). This with stamp duty at up to 17%, legal and agends costs etc. with vat at 20%, IHT at 40%, CGT without even inflation indexation and on rents (without even deduction of interest costs (thanks to Osborne). Confiscation and wealth taxes in effect.
Also a house now is rather more than a house 50 years back which in general had little insulation, single glazed and prob, rather little heating and rather fewer loos and bathrooms.
September 22, 2026
Good questions but I doubt you will receive any answers from those perpetuating the anti triple lock drum beat.
September 22, 2026
What about lump sum back payments that I have made to fill missing year’s contributions when I was not working?
September 22, 2026
Me too.
September 22, 2026
There’s an argument that the state pension could be increased solely with reference to CPI but, as you suggest, the savings would probably be negligible in the scheme of things. Badenoch would have a field day should legislate be tabled, one would think. The appeal to the Left of triple lock abolition is that it would irritate those horrible Tory pensioner types that they detest. Thats reason enough to go ahead with it in the eyes of people like Bridget Philipson and Angela Rayner.
September 22, 2026
The Telegraph has been missing from my list of reading material for quite some time. They used to be a good provider of news – a shame they chose the same path as other msm.
The triple lock was put in place to make life fair for pensioners, but since all funds are contributed what business of every daft leftie to want to make pensioners worse off, is it?
This show how desperate the labour party is to reduce living standards all round.
September 22, 2026
Dear Mr Redwood,
The triple lock should be abolished. Whilst everything you say about the funding of the state pension is true, the fact is that it is paid by those presently in work. The triple lock was introduced to remedy the fact that over the years the state pension had been allowed to wither. It has now been restored to a reasonable level. The triple lock should be replaced with a provision that it will index in accordance with average earnings so that those who pay it do not feel that those they support through their NICs are being enriched at their expense.
This leaves the question what to do with the surplus arising. Here’s a novel suggestion: it should be invested for the payment of future pensions in the same way that private pension funds are invested, i.e. beyond the reach of politicians and their pet schemes. This would require primary legislation to the effect that independent trustees were to be appointed to invest any surplus contributions and to use the income arising to pay the pension commitments. The trustees would be obliged to act solely in the interests of the beneficiaries of the scheme. Who knows, over time the scheme might become self funding!
September 22, 2026
J+M, if you think the state pension of less than 1/3rd of average UK full-time earnings is ‘reasonable’ then I suggest you purchase yourself a dictionary.
After Covid the Conservative government suspended the wages element of the triple lock for the tax year 2022/23 (when the increase was 3.1%) as they considered circa 8% as too high even though inflation was around 8% for 2022 and 6% for 2023 for reasons our host has expounded at length.
And if you think private trustees would perform expertly then you only have to study the spectacular fall from grace of a ‘star’ fund manager in 2019 to realise what a stupid suggestion this is because with a government you are at least generally immune to their all too often catastrophic management of the economy.
September 22, 2026
@J+M – then the problem. ‘By Law’ those now retired had to pay to support all those that went before them, if they paid the fall contributions for 30 years they were ‘entitled’ a full basic State Pension for this 2026/27 tax year of £184.90 a week. Then Labours enforced punishment of the economy, or the removal from it, the rise in rates heating lighting, food etc. Then to cap it all the Pay Award to State workers of up to 6.3% all directly cause a rise in costs and effect the triple lock. If there is a mysterious pressure on the triple lock is comes from Parliaments neglect, lack of thought and ineptitude they control the cause of rising costs
30-40-50 years ago those same people were on the low wages of the day paying for the education of those coming through and the pensions of those then retired. They were trapped with no surplus funds and generally unless they worked for the State no other pension provision. Those that did try to become self supporting had their pensions raided to the tune of £5 billion a year by Gordon Brown.
Changing things for the future is one thing, suggesting punishing those on already state pensions retrospectively is malicious hate.
Don’t get me wrong, the whole thing started out wrong. To most of us investing in a pension means creating a pot a growing investment for ones future – Socialism doesn’t work that way. Just because something is Compulsory doesn’t mean it couldn’t have been done as an investment pot. But in a Socialist UK things don’t work that way someone always has to have money stolen to provide for the voting support of others – so we have Parliament legalised illegal Ponzi schemes.
Then this “Migrant households receive record £12bn in universal credit. Some £7.7bn in payments went to jobless foreign nationals last year, government figures show” one sector contributes the other sector just ‘gets’ The pensioners get the blame
The triple lock in isolation solves nothing in fact it harms the defenceless. It will take 40-50 years to turn things around but elections arrive quicker so nothing gets done
September 22, 2026
Many who have been paying for a decent retirement would disagree – it’s far from adequate.
Germany, showed what a decent pension could do for it’s people. Growing up I knew a family that had German grandparents. At least once a year retired Oma would come and visit, while our pensioners could barely scrape a living.
Things haven’t changed greatly for a lot of UK pensioners, and none can afford still to travel as they’d always wished. We treat our pensioners abysmally expecting them pass on once they’d st6opped working, instead of enjoying their golden years.
September 22, 2026
Let’s not kid ourselves here. When governments start expressing ‘opinions’ about a subject, when they ‘leak’ ideas into the public domain. It’s a softening up exercise.
Labour will end the triple lock, it’s as clear as day.
They need the money to give to the benefits brigade and the illegal immigrants. Sod those who paid into the system.
September 22, 2026
Is it possible for “the large and growing surplus “ to be spent on the growing cost of social care for the elderly?
September 22, 2026
Then why are they attacking the people that due to age are no longer in the position to change direction, develop different strategies, to create their own resilience going forward. The are in fact looking to change structure retrospectively, that is simply being malicious out of hatred. Seems to be just ‘petty’ hatred
It would be acceptable, but nigh on impossible due to the way NI Contributions are framed, developed and managed to wean those starting out in life of NI. While it has to be recognised that should be the aim, with the aid of creating a meaningful Thatcher style ‘opt out’, although there has to be a safe guard to block a Gordon Brown(Labour) way of killing that aim with his malicious £5billion a year raid on those that wished to stand on their own two feet. Socialist hate with a pension resilience and self-reliance and go out of their way to punish those that want to take care of themselves.
You are not a Socialist voter if you are not beholden to the Politburo for you daily bread
It seems strange that Lawson an ultra rich kid should be such a ‘lefty’ in such a nonsensical way, although maybe the doctrine is being forced on that Media Group by its, new Socialist Euro Owners. Out put the UK down at every opportunity. It is not reporting news any more it is a Foreign owner meddling in the UK’s internal Politics – it is similar to foreign donations to UK Political Groups
September 22, 2026
The 2.5% part of the triple lock is in effect only 2% as they have frozen allowances so taxes at 20% or sometimes higher, then we have council tax increases, energy carbon taxes and OAP’s inflation is typically far higher than average as mainly food, care costs, energy, house repairs, council taxes, insurance (now a 12% IPT on top) plus they now often have to pay for doctors and dentists as NHS ones are rationed or too delayed.
September 22, 2026
The new lefty owners of the Telegraph do seem to be changing the agenda a little. Will the sensible Allister Heath and Matt Ridley have their wings clipped or perhaps even be kicked out I wonder?
September 22, 2026
LL,
We all know you like the stuff Allister Heath churns out.
September 22, 2026
Excellent John,
Absolutely brilliant !I
Everybody must work together to change the current bond market structure because today it is nothing more than the gatekeeper of neoliberalism and Remainers.
Its current job is to prevent any meaningful political change regardless if it is Truss, Burnham or Farage.
As you correctly point out John it has absolutely nothing to do with the triple lock. What anybody refuses to say is it all because of the FULL FUNDING RULE!
What is it and why was it introduced ?
The UK’s current ‘full funding’ rule dates back to 1985 when it was introduced to neutralise the public sector’s influence on the M4 money supply.
This Maastricht treaty framework was solidified by a 1995 review long before critical developments like Bank of England reserves, interest on those reserves, and Quantitative Easing (QE) reshaped today’s monetary dynamics.
The rule’s foundation—derived from FIXED EXCHANGE RATE and monetarist orthodoxy— it does NOT reflect the operational reality of the UK’s floating exchange rate regime today in any way shape or form.
The floating exchange rate fundamentally alters how government spending interacts with a currency area. When the government spends, in effect it gives the private sector the money it uses to buy government bonds.
At an aggregate level, in the UK, the choice boils down to holding a gilt or a Bank of England deposit. There is no other alternative. This interdependence makes the lifetime price of a gilt a reflection of expected Bank of England deposit rates over the same period.
Yet, the Debt Management Office (DMO) remains shackled by 1990s thinking, issuing long-term gilts into a market seeking shorter durations. For instance, recent ultra-long gilt sales forced the country to lock in a 5% running yield on £2.25 billion—higher than the current Bank Rate of 4.75%. This mismatch is costly and entirely avoidable.
The DMO should never sell gilts at yields exceeding the Bank Rate. Instead, it should align its operations dynamically with any market preferences for shorter maturities, as determined by current redemption yields. At a minimum, the government should adjust the DMO’s remit to ensure gilt issuance is always cost-effective regardless of market conditions.
Moreover, the outdated full-funding rule, grounded in discredited fixed exchange rate monetarist beliefs about the M4 money supply, should be scrapped.
As of pre Mastricht treaty, HM Treasury should leave deficits on the Ways and Means account at the Bank of England, paying the Bank Rate. This approach eliminates redundant cash management processes, saving costs and streamlining operations.
The DMO’s role should shift to reducing this default cost by issuing gilts and Treasury Bills on tap, priced in line with Office of Budget Responsibility (OBR) yield curve projections. It should only issue securities if doing so would be cheaper than the projected floating path alternative, ensuring interest payments on any deficit increase remained within budget.
The UK’s debt management framework is stuck in the past, constrained by fixed exchange rate, Bretton Woods, monetarist principles that never applied in the first place. Just as the government recently updated its debt definition from Public Sector Net Debt to Public Sector Net Financial Liabilities, it must now overhaul debt management practices to reflect modern monetary realities. By embracing a more flexible, cost-efficient approach, we can discard outdated fixed exchange rate constraints and better support the nation’s renewal.
A debt management review is well overdue. Let’s make 2026 the year we move beyond 1990s thinking and embrace a framework that fits today’s economic challenges ?
MMT economists have provided their solution for 30 years. They have been ignored because it would defeat neoliberalism and dismantle the current bond market structure that acts as the gatekeeper for neoliberalism today.
None of the neoliberals like that.
Conservatives who support Brexit need to get their act together and very quickly. Otherwise, Any Brexit supporting prime minister will face the same onslaught and get nothing done. All because the bond market said no.
Start with government spending. The government instructs its central bank to credit bank accounts. That creates a government liability to the private sector. Taxation subsequently removes those government liabilities from those accounts, leaving a balance.
In a sensible modern money world, that is where it would end.
Those who want to hold money can do so until they feel like spending it, at no cost to the government or the rest of us.
That’s the true extent of the tyrannical monster that will apparently devour our grandchildren. A trivial balancing item in the national accounts that ought to concern no one but the holders.
Government securities operate alongside this process as a policy choice made by the government we elected. Their current policy is to give free money to people who choose to hold the trivial balancing item. A policy presently shared by all political parties.
Issuing a Treasury bill, gilt or other government security exchanges one government liability for another. A bank deposit becomes an interest-bearing security, which is, at root, just a deposit with the Treasury rather than a bank.
The only other aggregate choice is to continue holding the commercial bank deposit and standing the risks of doing so.
This gives us the obvious operating rule for a Treasury serving current government policy:
Supply the government security at the lowest possible current-year cost.
The simplest arrangement promoted by MMT economists is to operate at the short end of the current curve. Then set the interest rate on reserve balances at 0% permanently.
Providing ONLY Three-month bills give the private sector a safe, interest-bearing government asset while keeping the government’s interest cost closely connected to the central bank’s policy rate. The bills mature and can be rolled over continuously because no other rational aggregate choice exists, giving the government a simple, predictable maturity structure, all without requiring legislative changes.
The holders of sterling liabilities are Then faced with a choice….
1. Hold sterling as a reserve balance paying 0% interest and either use it to buy UK goods and services or lose it to inflation.
Or
2. Hold 3 month sterling bills.
As they have no other choice.
Then apply the rule to the existing stock of government debt.
Where long-term bonds carry substantially higher yields than short-term bills, buy back the bonds and replace them with 3 month bills. Where the market demands a high yield for longer-term duration, stop supplying that duration.
Make it normal practice. Make it the new policy.
That leaves a very simple government policy.
Issue short-term bills as the standard government security. Roll them continuously. As the central bank determines the overnight interest rate, the government’s interest cost follows that rate closely, because the overnight interest rate is the only aggregate alternative on offer in our currency.
Long-term government bonds provide investors with fixed income over many years. They can be supplied where the government has a reason to provide that particular asset.
Pension funds, insurers and other investors may value the duration. They will show that by the price they are willing to pay relative to short-term bills.
Until then, don’t issue them.
Job done. You have just slayed the neoliberal and Remainers gatekeeper.
If conservatives who support Brexit don’t like the MMT solution. Then it is so obvious to everybody they need to come up with their own strategy to dismantle the bond market in its current form.
September 22, 2026
Scrapping the triple lock is ridiculous, given how much spending is wasted. The UK pension is not generous, so the triple lock is some protection for pensioners.
Here is what they could do to make it affordable: cut welfare spending drastically. No one on welfare or benefits should be paid more than someone on the minimum wage. It is absurd that a small number of families
have had a £22k increase because Labour scrapped the two-child limit. A person or family on welfare should never be better off than a person on minimum wage after deductions. So if the minimum wage on a 40-hour week earns a person, say, £20k*less £1500* income tax and £ 2000* NI contribution, their net wage is £16500. That should be the maximum anyone can receive on welfare or benefits. (* figures not accurate; used to keep the example simple. ) Tough but fair, then the triple lock is comfortably affordable. Why do Labour hate pensioners?
September 22, 2026
The basic UK old age pension works out at £11620 pa at present and is much lower than other European countries. Only Poland has a substantially lower pension and their living costs are lower. Even when occupational pensions are added, the UK is lower than average and most of these are probably public sector. France and Italy put 12% of GDP to pensions, we put 4.7%.
Those of us who invested in Buy to Let to provide a pension have been attacked and profits are below rates for building societies savings. I have had to close my main investment because the regulations and huge fines are too risky and being unable to vacate a property for sale to pay IHT is disastrous for bereaved family.
September 22, 2026
Socialists seem to hate pensioners. Gordon Brown was the prime example keeping them relatively poor so that they were reliant on state handouts to keep them voting Labour and, of course. they will currently indicate that any Conservative-type government would cut these benefits. Labour also deplore the fact that some people have made a success of their lives and want as much as possible of their money when they die.
September 22, 2026
1 uprate it by inflation.
2 if you want a contributory fund make it properly contributory. Basically pay in x, get an annuity based on X plus investment returns at retirement. Anything else is a fudged contributory fund, where a random portion of tax paid in work is allocated to this “fund”. I don’t receive a statement of my share of this pie through my working life, and the amounts payable at retirement have been altered through my working life without any fixed basis.
Even now random political decisions determine amounts paid, not how much I’ve paid in. So links with contributions are very tenuous.
September 22, 2026
Desperately seeking publicity and funding for Labour’s sinking ship to boost their abilities to make waves in storms of their own stupidity and ignorance of incentives in Economics and Business. Why Save at all with this nonsense ?Because Savings is basic to Investment and Economics and Growth.
NICs were supposed to be “Ringfenced” by trusted Governments (especially after Maxwell s and other Pension funds like Equity Life were raided in the Private Sector).
Sir Jim Ratcliffe hit the bullseye saying we need a politician who can stand up for the country rather than party, adding
“No one is dealing with the immigration problem, and no one is tough enough to deal with the benefits problem. Someone needs to address this, otherwise the country ends up in a bad place and goes broke”.
Lawson needs to focus on the Public Sector Gold plated pensions ( and the many sizable other waste areas that Lord Redmond has identified over the years).
September 22, 2026
Pensioners are liable to pay Income Tax on their meagre state pension. Those pensioners with a higher income will pay a higher rate of tax. Is this not enough ?
Maybe, to try and balance the books, we should make all “benefits” liable to Income Tax ?
https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits
….or maybe we should reign in the profligacy ?
That should do the trick.
September 22, 2026
theft of pension funds, by various tax wheezes including massive inheritance tax on them puts completely the wrong incentives in the system. lots of people are going to transfer their pensions and themselves abroad, and lots more people will no longer bother contributing into pensions.
the massive disincentives in the system are going to destroy what is left of this country.
September 22, 2026
I was dismayed with Lawson’s response and even more dismayed with DT’s behaviour. The State Pension is far from generous, indeed I’d like to see Mr Lawson subsist on it! The financial health of the National Insurance Fund now and in future is vitality important and must not be tampered with. Hands off I say to Mr Lawson, your argument is deeply flawed.
September 22, 2026
remember when:12/2/24- get Britain working again? Get 80% of 16-64 y/o into work?
Latest stats available now:economically inactive 20.9%.My day 65 years was retirement as a matter of fact.
Private and public employment(local and central).Hence the pension contribution underpinned the payouts.
By any analysis for far too long the the contributions have fallen way short of what is needed to meet the
calls.Try as you may you cannot make a silk purse out of a sows ear unless you kill the sow!By any standard
without radical action this country is headed for the knackers’ yard
Reply The current high level of NI contributions is well above what is needed to pay the state retirement pension. The unfunded civil service and teachers pensions are a bigger problem, alongside the run away benefits bill.
September 22, 2026
The State pension I receive after contributing to since I was 16, yes 16, and pretty soon paying that extra nonsense 6d per week added to my pension 50 years later for every £7.50d I paid in I think.
This is a rather long-term saving scheme for old age…..NOT a benefit …. I paid in every one of 49 years so I resent the term benefit. Pensioners all those years ago were helped in THEIR old age from my contributions, and at many times raising a family I would like to have had lower contributions forced from my income.
September 22, 2026
Alternatives to the Triple Lock could involve linking the state pension to other measures.
1, A fixed percentage of full time median earnings.
2, A fixed percentage of full time (40 hours/week) earnings on minimum wage.
3, A fixed percentage of GDP per capita.
The Triple Lock is projected to take the UK state pension from less than 5% of GDP to 8% in less than 50 years. That’s an increase of more than the entire current defense budget.
Some politician needs to have the guts to propose and argue for an alternative. Those of us who are picking up the tab need it to happen.
September 22, 2026
JR I hope you will say something about the comments of Paul Richards, Treasurer of the Fabian Society who appeared on the Mogg show with you.
I have been defending you all day and denying that you concurred with the suspension of Haebus Corpus so that British citizens can be jailed for not wishing to fight Russia, the greatest nuclear power on earth, and conscripted.
These are horrifying suggestions and most especially as the country is occupied by and anti-ethnic aggressive force which has been raping Britain for decades. Literally.
Reply I did not agree with that comment. I was very careful in what I said.I have always supported the NATO policy of keeping out of the Ukraine Russia war.