DWP State Pension triple lock to become 'unaffordable' and 'new plan is needed'

The triple-lock may soon become unaffordable for the government and the DWP, it has been warned today (Friday) by an expert.

A finance expert has issued an update about the future of the Department for Work and Pensions ( DWP ) State Pension triple-lock. The triple-lock may soon become unaffordable for the government and the DWP, it has been warned today (Friday) by an expert.

The 'triple lock' is a commitment, beyond this legal requirement, to increase State Pensions by whichever is highest of average earnings growth, CPI inflation, or 2.5%. The triple lock was first introduced by the Coalition Government and came into effect in the 2011/12 financial year.

Mark Pemberthy, benefits consulting leader at insurance group Gallagher, said: “Whilst the triple lock may be affordable over the next five years, it looks unsustainable in the longer term. ‌The future cost of the state pension as a percentage of GDP is projected to increase by more than 50 percent over the next 50 years and this looks unaffordable."

READ MORE All the parts of England set for heatwave this weekend with 13 areas hit

He was speaking out to the Daily Express newspaper today. He went on: “It is important that we look beyond the short term political cycle and establish a stable long-term plan for a sustainable state pension, if we are all going to be able to plan for our futures with confidence whilst ensuring fairness for future generations.”

Carl Emmerson, Deputy Director of the Institute for Fiscal Studies (IFS), said: "Economic times since 2011 led to the triple lock pushing up the state pension by 60pc, whereas prices and average earnings have increased by around 40pc.

"But were we – and let’s hope we do – to enter a prolonged period of strong and stable economic growth, then under the triple lock the state pension would increase no faster than earnings. We can do better. What is needed is for politicians to state what share of average earnings they think the state pension should be and then legislate a pathway for getting there."