The Triple Lock's Real Cost
A policy designed to protect pensioners from poverty has grown the state pension 73% since 2011 — more than three times faster than working-age wages. Here's the full history, the real cost, and the bizarre tax collision it's about to cause.
How it works
The triple lock raises the state pension every April by whichever is highest of three measures: CPI inflation, average earnings growth, or a flat 2.5%. Because it takes the highest of the three every single year — never the lowest, never an average — the pension effectively ratchets upward relative to both prices and wages over time, rather than simply tracking either one.
The history
The real cost
Annual state pension spending (Intergenerational Foundation / OBR)
The OBR projects the triple lock specifically (rather than a simple earnings-linked alternative) will add £15.5bn a year to spending by 2029-30 — roughly three times the cost originally estimated when the policy launched. The Resolution Foundation calculates that switching to a smoothed earnings-link this year alone would have saved £12.6bn in gross spending, or roughly £9bn net once lower income tax receipts and higher means-tested benefit spending are accounted for. Longer-term, state pension spending is projected to rise from around 5% of GDP today to roughly 9% by 2075-76 under current policy, versus about 7% if the pension were linked to earnings alone — with the triple lock mechanism itself estimated to account for around a third of that difference. The IFS's own long-run estimate carries genuine uncertainty — anywhere from £5bn to £40bn extra a year by 2050 in today's terms, depending on how volatile future inflation and wage growth turn out to be.
The collision with fiscal drag
The triple lock is now colliding directly with the frozen tax thresholds covered on our Fiscal Drag page. With the state pension having risen 4.6% in April 2026, the full new state pension lands just 15p a week short of the frozen £12,570 Personal Allowance. Because the Personal Allowance hasn't moved since 2021/22 and won't until at least 2028, the UK is now roughly one more good pension uprating away from pensioners with no other income at all owing income tax purely on their state pension — a genuinely perverse outcome for a policy explicitly designed to protect pensioners, and one two entirely separate frozen/uprated systems have driven into collision without either being specifically designed to.
Reactions
“Signalled his intention to preserve Labour's manifesto commitment to the triple lock, despite the OBR's warnings.”
“The triple lock remains a vital protection against pensioner poverty, particularly for those with little or no income beyond the state pension itself.”
“Why should pensioners' incomes grow at faster rates than those funding the system?”
“The triple lock is widely regarded as unsustainable in the long term in its current form.”
In the news
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