Some key changes to the state pension are taking place now
The future of the triple lock is look dubious with experts questioning its long-term sustainability. The policy has delivered substantial pay rises for pensioners in recent years, including a record 10.1 per cent increase in April 2023.
The triple lock policy ensures that the state pension rises each April in line with the highest of three measures. These are a minimum rate of 2.5 per cent, the rise in average earnings or inflation. However, with the costs of the policy escalating each year, some policy experts warn it cannot continue indefinitely. Labour has pledged to maintain the triple lock for the remainder of this Parliament.
Triple lock changes
Yet with the current political upheaval and a new Prime Minister arriving soon, the future of Government policy is hard to predict. Kate Smith, head of Pensions at wealth firm Aegon, said: “It’s unlikely that we’re see any changes to the state pension triple lock during this parliamentary session.”
She was asked when a political party might announce an end to the policy. Ms Smith said: “As the nation’s finances become increasingly squeezed, we expect the political parties to start to begin to address its long-term future and may commit to a review in their party-political manifestos as we get closer to the next General Election, due in 2029.”
One party that has made its position crystal clear is Reform UK. The group headed by Nigel Farage pledged in April to “protect Britain’s pensions” and maintain the triple lock, by slashing other Government expenditure on benefits and foreign aid.
During the 2024 General Election campaign, the Conservatives outlined a ‘triple lock plus’ policy, whereby the personal allowance for pensioners would increase annually in line with the triple lock figure. The purpose of this was to ensure state pensioners would not pay income tax on their payments.
State pension tax change coming soon
In a similar move, Labour is introducing a policy so that those whose sole income is the state pension without increments will not be liable for income tax. The exact details of how this will operate are yet to be revealed.
But it will need to be in place by April 2027, when the full new state pension will exceed the personal allowance and become subject to an income tax bill, under the current rules.
Ms Smith said of the triple lock issue: “This is a highly politically charged debate, and I expect all political parties to tread carefully, but with an ageing population it’s one that needs to be addressed.” A key concern as the population grows older is that there will be fewer taxpayers contributing to the system to cover the state pension bill for an ever-increasing number of claimants.
State pension qualifying rules changes underway
One change to state pension rules is currently being implemented that will effectively limit how much future claimants get. The state pension age is presently increasing from 66 to 67, rising gradually between April 2026 and April 2028.
Legislation has also been approved for another increase, from 67 to 68, between 2044 and 2046. There has been debate about accelerating this timeline.
Labour confirmed in 2025 that another review of the state pension age would take place. An independent assessment will be undertaken by Dr Suzy Morrissey, with the Government to then consider her proposals.
