A looming crisis threatens 26 million state pensioners as the government considers scrapping the decades-old state pension triple lock. Sir Steve Webb, former Pensions Minister and current partner at pension consultants LCP, has issued a stark warning that abandoning this policy could lead to a dramatic fall in retirees’ incomes and living standards.
Sir Steve Webb, who served under the Conservative-Liberal Democrat coalition, described the potential fallout as “shocking,” highlighting significant under-saving for retirement across the UK. According to his analysis, millions of retirees face a steep decline in their quality of life if the triple lock — which currently guarantees pensions rise each year by the highest of inflation, average earnings growth, or 2.5% — is replaced.
Webb explained that while few expect the triple lock to remain in place indefinitely, replacing it with an earnings-linked system would still leave millions worse off. “An earnings link would cause a sharp drop in pensioners’ living standards,” he said. Worse still, reverting to the price link (used prior to 2010) would push about one in three future retirees below what is considered a ‘minimum’ acceptable standard of living.
READ MORE: Octopus Energy Launches Pink Friday with Daily Freebies and Prizes
READ MORE: Martin Lewis Reveals 7 Banks Offering Up to £1,525 to New Customers in November
The analysis projects that scrapping the triple lock could increase the number of retirees falling below the Pensions UK minimum threshold. An earnings link would see 1.4 million additional pensioners failing to meet this baseline, while a price link would result in more than 7 million extra pensioners retiring with insufficient income.
Amid these worrying figures, Webb urged the Chancellor to focus the upcoming Budget, scheduled for November 26, on measures that encourage pension saving rather than policies that might weaken retirement security.