For 15 years, the State Pension has risen thanks to the triple lock. Since it was introduced in 2011, payments have grown by 125% far faster than inflation.
But as the Chancellor, Rachel Reeves, faces increasing pressure to balance the books, how much longer can that inflation-busting promise last?
The triple lock under pressure
The steady rise in the State Pension is all down to the triple lock which was introduced to protect pensioners and their income – and it has done its job. It’s a government commitment to increase the benefit every April by the highest of:
- inflation;
- average wage growth; or
- 2.5%.
According to the Institute for Fiscal Studies (IFS), the triple lock adds around £11 billion a year to the cost of the State Pension. In 2024/25, total spending on the benefit is expected to have hit £125 billion. That’s more than half the government’s entire welfare bill.
As a result, the Office for Budget Responsibility (OBR) has flagged the triple lock as a significant fiscal risk. If it remains, then a dangerous combination of inflation and an ageing population could send State Pension spending on an upward spiral. That’s why many economists believe the triple lock is too expensive to maintain.
How will the government review the State Pension?
Changes to the State Pension are on the way, as the government continues to look for ways to cut government spending,
There are two main proposals that do the rounds on the rumour mill – and in election manifestos. The first idea is turning the triple lock into a double lock. Dropping the 2.5% guarantee and simply increasing the State Pension by the higher of inflation or wage growth.
The second is to increase the age when you can claim your State Pension. This is a tried and tested method. Since 2000 the age has risen from 65 to 66 for men and 60 to 66 for women. It’s due to go up to 67 by 2028, and then to 68 eventually. The OBR estimate pushing the age from 66 to 67 alone saves the government around £10.5 billion a year.
There’s another reason further rises to the State Pension age could be on the cards. There’s no vast mountain of money paying out the pension. It’s paid from the National Insurance contributions (NICs) of today’s workers. As more of us live longer and fewer people are working, the financial supply to pay the pension will shrink. According to the International Longevity Centre, we need to increase the pension age to 70 or 71 just to maintain the current balance of workers per pensioner.
The tax problem
Finally, if the triple lock remains and the State Pension continues to increase, it impacts the amount of tax you pay. The full new State Pension is now £11,973 a year (2025/26) – just £597 below the threshold before Income Tax is due. So, even a small private pension income could push some retirees into paying tax.
And that tax bill is looming fast. If the State Pension rises by 5.5% next year, as some economists expect, it’ll exceed the Personal Allowance of £12,570 (2025/26). That would mean pensioners paying tax on their State Pension alone.
What does this mean for you?
It’s impossible to predict exactly what could happen to the State Pension, but the good news is you can act now to protect yourself from any future changes. Whether you’re due to retire in months or decades there are steps you can take to protect yourself and your future retirement:
- Start with the basics and check your State Pension forecast at GOV.UK - this will tell you how much you’re on track to receive and when you’ll be able to claim it. You need 35 years of qualifying NICs to get the full amount. If you have gaps, it may be worth making voluntary top-ups.
- Make sure you have other pension provisions - if retirement is still a long way off, you have time to prepare. Paying into a personal or workplace pension now can help top up your future income. Plus, it gives you an income to bridge the gap if you want to stop working before you hit the State Pension age. This could be especially useful if it continues to rise.
- Regularly check whether you’re on track for the retirement you want - the PensionBee Pension Calculator can help you estimate how much you’ll need and show you how even increasing your pension contributions slightly can make a huge difference to your pot over time.
- Consider your pension withdrawal options - if you’re approaching retirement, one option to consider is an annuity - which pays you a guaranteed income for life or a fixed period of time. You can use some or all of your pension savings to buy an annuity and they can bring invaluable peace of mind in retirement.
The State Pension is a valuable income stream in retirement, but don’t rely on it alone. A bit of planning will make you far more resilient to any future changes.
Ruth Jackson-Kirby is a Financial Journalist passionate about making money matters clear and accessible. She’s written for The Mail on Sunday, MoneyWeek, The Sun, and Good Housekeeping, helping readers navigate pensions and personal finance with confidence. She believes everyone deserves financial security and is on a mission to cut through jargon and make finance relatable.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
