State pensioners could face changes to the long-standing Triple Lock system, with experts urging a shift in focus to support younger generations. The Intergenerational Foundation has outlined three potential reforms to the tax and pension systems that could help the Treasury balance public finances and reshape the social contract between older and younger households in the UK.
Conor Nakkan, a researcher at the think tank, has called on Labour Party Chancellor Rachel Reeves to use the upcoming Budget as an opportunity to make public finances more sustainable. Nakkan highlighted the growing financial burden of the state pension Triple Lock, a policy introduced in 2011 that guarantees annual pension increases based on the highest of average earnings growth, inflation, or 2.5%.
“The Triple Lock has substantially benefited older people, but its rising cost is increasingly borne by working-age taxpayers,” Nakkan explained. The Office for Budget Responsibility estimates that by 2029-30, the Triple Lock will cost £15.5 billion annually—nearly three times the £5.2 billion forecast when the policy was first introduced.
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Meanwhile, public spending on youth services has dramatically decreased. Between 2010 and 2020, local authority funding for youth services was cut by more than 70% in real terms. By 2023, approximately 1,200 youth centers had closed and over 4,500 youth workers had lost their jobs. Research connects these cuts to declines in educational performance and rising youth offending rates.
To address these challenges, the Intergenerational Foundation recommends temporarily replacing the Triple Lock with inflation-based pension increases for the next five years. This adjustment could save around £8 billion annually by the early 2030s, easing pressure on public finances. Once government debt is on a sustainable path downwards, an earnings-linked increase could be reintroduced to ensure pensions keep pace with living standards in the long term.
A government spokesperson reaffirmed its commitment to the Triple Lock, stating, “Our commitment to the Triple Lock is unwavering because we want pensioners to enjoy the dignity and respect they deserve in retirement. This means millions will see their State Pension rise by up to £1,900 over this parliament.”