Triple-lock change could save £650m a year by Parliament’s end

Prime Minister Andy Burnham has proposed a social-care service free at the point of use for everyone in England. Labour plans to put the proposal in its next general-election manifesto rather than introduce the reforms before then. Burnham said everyone would contribute, but has not specified how the service would be funded. [1]

That question has focused attention on the state pension triple lock, which raises pensions each April by whichever is highest: earnings growth, inflation or 2.5%. Writing for ITV News on 27 September, political editor Robert Peston said he thought Burnham might partly fund the care service by reforming the guarantee. Peston added that he was not certain this was Burnham’s plan. [2] [3]

In BBC analysis published on 28 September, economics editor Faisal Islam said replacing the triple lock with a link to earnings could save tens of billions of pounds a year in the long run and might help fund some form of national care service. He said the outcome would depend on the scale of the care plan, the replacement pension policy and future inflation. [3]

Asked earlier in September about changing the triple lock in the next Parliament, Chancellor John Healey spoke instead about the need to bring down welfare costs. [3]

Pension campaigners argue that the UK state pension is modest by international standards, though pension systems and private provision differ between countries. Burnham says Baroness Casey will advise on the proposed care system and how it could be funded. [1] [3]

Update

The Resolution Foundation estimates that replacing the state pension triple lock now with a link to earnings would save about £650m a year by the end of this Parliament. BBC News reported the calculation as part of its examination of how Prime Minister Andy Burnham’s proposed social-care reforms in England might be funded.