UK’s pension triple lock to cost three times more

The cost of the state pension triple lock is forecast to be three times higher by the end of the decade than its original estimate, according to the government’s official forecaster.

The triple lock, which came into force in 2011, means that the state pension rises each year in line with either inflation, wage increases or 2.5% – whichever is the highest.

The Office for Budget Responsibility (OBR) said the annual cost of the triple lock policy is estimated to reach £15.5bn by 2030.

In response to the report, the government said it was “committed” to the current policy.

“We are committed to supporting pensioners and giving them the dignity and security they deserve in retirement,” a Treasury spokesperson said.

Overall, the OBR said the UK’s public finances were in a “relatively vulnerable position” owing to pressure from recent government U-turns on planned spending cuts.

The recent reversal of welfare bill reforms, on top of restoring winter fuel payments for most claimants, have contributed to a continued rise in government debt, according to the report.

It said: “Efforts to put the UK’s public finances on a more sustainable footing have met with only limited and temporary success in recent years in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances.

“Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned.”

On Tuesday, the cost of government borrowing over a period of 10-years was 1.2% higher than Monday’s close, following the OBR’s report.

It had been steadily rising in recent days after surging in response to a tearful appearance by Chancellor Rachel Reeves in parliament, which sparked speculation over her future, and the government’s climb down on welfare reform.

A Downing Street spokesperson, asked whether the government was not listening to “alarm bells” expressed by the OBR, replied “no, I don’t accept that”.

“What we recognise is that the public finances need to be brought back under control,” he said.

“We’ve had a decade of the UK being exposed to global risks more and more and to interest rate fluctuations, and that is why we have non-negotiable fiscal rules, and that is our focus.”

The OBR said the cost of the state pension has risen steadily over the past eight decades, from around 2% of the UK economy to a current 5%, equating to £138bn.

It is forecast to increase to 7.7% of the economy by the early 2070s.

Spending on the state pension has steadily risen, the OBR said, because the triple lock and a growing number of people above the state pension age.

It added: “Due to inflation and earnings volatility over its first two decades in operation, the triple lock has cost around three times more than initial expectations.”

Richard Hughes, chair of the OBR, said the triple lock “is one of a series of age-related pressures that pushes public spending upwards steadily over a number of years”.

“When you project trends in both pension spending and health and other age-related spending forward, the UK public finances are in an unsustainable position in the long-run,” he said.

“The UK cannot afford the array of promises that are displayed to the public if you leave those unchanged based on a reasonable assumption about growth rates in the economy and in tax revenues.”

The UK’s state pension is the second-largest item in the government budget after health.

In 2011, the Conservative-Liberal Democrat coalition brought in the triple lock to ensure the value of the state pension was not overtaken by the increase in the cost of living or the incomes of working people.

Since then, the non-earnings-linked element of the lock has been triggered “in eight of the 13 years to date”, the OBR pointed out.

That was because inflation “has turned out to be significantly more volatile” than expected.

In April 2025, the earnings link meant the state pension increased by 4.1%, making it worth:

• £230.25 a week for the full, new flat-rate state pension (for those who reached state pension age after April 2016) – a rise of £472 a year
• £176.45 a week for the full, old basic state pension (for those who reached state pension age before April 2016) – a rise of £363 a year

Chancellor Rachel Reeves has said the Labour government will keep the triple lock until the end of the current Parliament.

However, before and since that manifesto promise, there has been intense debate over the cost of the triple lock and whether it is justified.

Last week, the influential Institute for Fiscal Studies, an independent economic think-tank, suggested the triple lock be scrapped as part of a wider overhaul of pensions.

It argued that it should rise in line with prices, but the cost should be linked to a target level of economy-wide average earnings.

Pensioner groups say many older people face high living costs and need the protection of the triple lock to avoid them falling further into financial difficulty, especially because the amount actually paid was far from the most generous state pension in Europe.