The Labour government has dismissed concerns that the state pension could be means-tested or that the triple lock could be scrapped. As reported by The Independent, Pensions Minister Torsten Bell assured pensioners that neither measure is under consideration, despite recent speculation sparked by opposition politicians.
Speaking at the Pensions and Lifetime Savings Association (PLSA) conference in Edinburgh, Bell made it clear that means-testing the state pension is not being considered, stating, “No, only Kemi Badenoch thinks that’s a good idea.” He also confirmed that the triple lock—which guarantees that the state pension increases annually by the highest of inflation, wage growth, or 2.5%—would remain in place.
What Does This Mean for Pensioners?
The triple lock has been in place since 2011, ensuring that the state pension keeps pace with rising living costs. In 2023, it resulted in a 10.1% increase for pensioners, reflecting the UK’s record inflation that year. In 2024, the increase will be 4.1%, equivalent to an extra £472 per year for pensioners, based on average wage growth.
Critics argue that the triple lock is too expensive in the long term. The Office for Budget Responsibility (OBR) has reported that the state pension system currently costs £125 billion per year, and this figure is expected to rise as life expectancy increases. However, the Labour government insists that maintaining the triple lock is essential to ensuring pensioners receive a fair and predictable income.
What Is Means-Testing, and Why Was It Suggested?
Means-testing the state pension would involve reducing payments for wealthier retirees—for example, those with large private pensions or savings. Countries like Australia and Canada already use means-tested pension systems, where state pension payments depend on a retiree’s other sources of income.
Conservative leader Kemi Badenoch had previously suggested that means-testing the pension should be considered to reduce public spending, arguing that the UK does not apply means-testing “properly.” However, Bell’s latest comments confirm that this approach is not being explored by the Labour government.
Concerns Over the Long-Term Cost of the Triple Lock
While Labour has confirmed the triple lock will remain, economists warn that it could become increasingly expensive over time. The Institute for Fiscal Studies (IFS) has stated that the triple lock creates “unpredictability” in public spending, warning that it could cost between £5 billion and £40 billion extra per year by 2050.
Despite these concerns, Bell’s reassurance means that, for now, pensioners can expect their state pension to continue increasing under the current system.
