Skip to content
ADVERTISEMENT
News

Burnham to end State Pension triple lock to fund national care service

Under the plans, the earnings element of the triple lock will be removed from April 2030, meaning the State Pension will instead increase in line with inflation or by 2.5%.

3 min read
Share
Andy burnham
ADVERTISEMENT

Prime Minister Andy Burnham has announced plans to end the State Pension triple lock from 2030 to help fund a national care service in England.

Under the plans, the earnings element of the triple lock will be removed from April 2030, meaning the State Pension will instead increase in line with inflation or by 2.5%, whichever is higher.

The current triple lock guarantees that the State Pension rises each year by the highest of inflation, average earnings growth or 2.5%.

Reaction:

Charlotte Kennedy, chartered financial planner at Rathbones:

ADVERTISEMENT

“The announcement highlights one of the biggest retirement challenges facing the UK: how to balance the cost of supporting an ageing population with the need to provide pension security for future retirees.

“Few would dispute the need for social care reform, but many will be asking what this means for the future value of the State Pension.

“For future generations, the expectation is increasingly that individuals will need to take greater responsibility for funding both retirement and later-life care themselves.

ADVERTISEMENT

“That uncertainty is already evident. Our research found that 49% of affluent UK adults say uncertainty around pension policy makes them anxious and leaves them needing additional support when making financial decisions, while 58% rank changes to tax rules affecting their retirement income among their leading retirement concerns.

“The focus on social care is particularly significant. While care provision is becoming a bigger policy priority, many people still aren’t planning for it financially. Our research found that 40% of affluent UK adults rank the cost of long-term or residential care among their top three retirement concerns, yet 45% have not factored potential care costs into their retirement planning at all.

ADVERTISEMENT

“This points to a significant planning gap. People often focus on building enough wealth to stop working, but retirement planning should also consider what happens if health deteriorates or care is needed later in life. The risk is that people are planning for retirement, but not necessarily planning for later life.”

ADVERTISEMENT

John Wilson, head of pensions technical at Aptia:

“This announcement was well-trailed and will not come as a surprise to many. There are arguments for and against the change, and there are alternative measures that could have been explored too.

“However, an announcement has now been made and, whilst it will not come into effect before the next General Election, it is a further reminder of the importance of good workplace pensions and not relying solely on state pension.”

Andrew Tully, technical services director at Nucleus Financial:

ADVERTISEMENT

“It’s widely agreed that the triple lock is not sustainable over the long-term, so the move to a double lock, which will see the state pension set to go up by the highest of prices or 2.5% sometime after the next general election, seems a fair compromise.

“With that said, rather than focus on the triple lock in isolation, we need to consider the future of our state pension system as a whole. This wider debate should consider a suitable level of state benefit, state pension ages, differing life expectancy across the UK, and support for those below state pension age who aren’t able to work.

“The future of the state pension is an emotive issue, and we mustn’t forget news of change may feel alarming to some. As a result, communication needs to be clear around any changes that are made to ensure people understand what it means for their money.”

Related