An expert has urged the Department for Work and Pensions (DWP) to reconsider the state pension triple lock, warning it risks “stealing” the future of younger generations. The triple lock, which guarantees that state pensions increase each year by the highest of inflation, average earnings growth, or 2.5%, was introduced in 2012 by the Conservative Party and Liberal Democrats coalition government.
Lord David Willetts, a former Conservative minister who currently serves as President of the Resolution Foundation and chairman of its advisory council, expressed concerns about the sustainability and fairness of the current system. He highlighted the challenges younger people face, stating it is “hard to see how younger people are going to reach anything like that level of home ownership” enjoyed by previous generations. Lord Willetts criticised the policy for providing “extraordinary increases” in benefits for older generations while imposing cuts on the next generation, describing this as difficult to justify.
Refuting the notion that pensioners have simply paid for their benefits through National Insurance and taxes during their working lives, Lord Willetts presented calculations indicating that someone born in 1956 is expected to receive more than 30% more from the welfare state than they contributed. In contrast, an individual born in 1996 is projected to receive less than 15% in return. He contends that the post-war baby boom generation has benefited from a system increasingly tailored to their advantage as they have aged.
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This perspective forms part of the argument in his book, “The Pinch,” which discusses how the baby boom generation has drawn resources from their children and advocates for them to “give it back.” Lord Willetts calls for a “clear shift of resources” towards younger people, suggesting measures such as assistance with housing deposits and enhanced investment in training and support for young individuals not currently in education, employment, or training.
A Resolution Foundation analysis published in June reported that state pensions have already increased by 11% above what they would have been if linked solely to earnings since 2012. This rise is partly due to the triple lock’s design, which tends to increase pensions sharply when inflation or earnings experience spikes. The Foundation has argued that the triple lock has become a costly mechanism for raising pensioner incomes and that state pensions are now the primary driver of increased welfare spending during the current Parliament.