Pensions industry backs triple lock reform
The pensions industry has broadly welcomed Prime Minister Andy Burnham’s decision to replace the state pension triple lock with a new “double lock” from 2030. This change will see the state pension rise annually by the higher of inflation or 2.5 per cent from April 2030, while maintaining its value relative to earnings over the longer term.
Questions about whether retirees will receive enough support are now central to the debate. Zoe Alexander, policy chief at Pensions UK, said the triple lock had helped restore the state pension’s worth but admitted it couldn’t last forever. She emphasized that how future increases are calculated against earnings will be decisive in determining fairness.
Industry Reaction
Alexander believes the shift strengthens the argument for expanding automatic enrolment, urging the government to encourage higher savings rates and broader participation to help people meet retirement goals. Patrick Heath-Lay, CEO of People’s Partnership, agreed, stating that smaller state pension rises from 2030 will likely push the case for increased workplace pension contributions even further.
Patrick Thomson, who leads research at Standard Life’s Centre for the Future of Retirement, pointed out that the change will particularly affect Generation X, many of whom are nearing retirement after losing access to traditional defined benefit schemes. He stressed that the double lock must be balanced with decisions on pension age and higher automatic enrolment contributions.
Adam Cole, a specialist at Quilter, called the government’s promise to keep the state pension aligned with earnings ‘meaningful,’ but cautioned that the specifics will determine success. He questioned whether the link would be based on average or median wages, whether earnings growth would be averaged over time, or if another method would be used.
Earnings Link Concerns
Kate Smith, head of pensions at Aegon, raised similar concerns, suggesting the new system might smooth out earnings fluctuations over multiple years. She argued that while earnings should still influence pension rises, the exact method must ensure retirees benefit if wages grow much faster than inflation.
David Brooks, Broadstone’s policy director, noted that the plan seems to favor a gradual earnings adjustment instead of the current annual adjustment method. This approach could help stabilize the pension’s link to average wages while softening the impact of sudden wage spikes on future payments.
Mark Pemberthy, a benefits consultant at Gallagher, called the proposal a ‘major shift’ but noted that retirees will still be shielded from inflation and guaranteed at least a 2.5% annual increase. He added that clearer care cost policies could simplify retirement planning for many.
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The Investing and Saving Alliance (TISA) head of policy: products and long-term savings Renny Biggins also supported the direction of travel, arguing that an adjusted lock could protect pensioners from rising living costs while creating a more predictable framework for long-term public spending.
However, Rachel Vahey from AJ Bell questioned whether the savings from ending the triple lock would be enough to fund a National Care Service. She warned that the change would only reduce future pension costs—not roll back already promised increases—meaning extra funding would still be needed to cover care expenses.
Howden Employee Benefits head of defined contribution pensions Mark Futcher warned that if earnings growth outpaces the new double lock for long periods, workplace and private pensions will need to shoulder more of the burden of retirement provision. He said pension and social care policy need to be considered together as part of a coherent long-term strategy, rather than in isolation.
Isio director Iain McLellan similarly warned that a less generous state pension over the longer term could mean some members need to save more privately. He suggested that schemes should consider how the reforms affect projected retirement incomes and ensure members understand the interaction between state and workplace pensions.
My Pension Expert policy director Lily Megson-Harvey said ending the triple lock is a significant change for people who had spent years making retirement decisions around the existing system. She argued that the priority now should be to give pensioners and savers enough clarity and notice to adapt, particularly regarding how the earnings link will operate.
Calum Cooper, Hymans Robertson head of pensions policy innovation, noted that the announcement has opened the “right debate”, but stressed that reform should not become a simple cost-cutting exercise, as Cooper emphasized the need for a clear adequacy target and a credible long-term link to earnings, with the state pension set to rise by the higher of inflation or 2.5 per cent from April 2030.
Long-term Implications
The introduction of a double lock is expected to have far-reaching consequences for pensioners and savers.
