The Long-Term Impact of the State Pension 'Triple Lock'

Berry, CP (2017) The Long-Term Impact of the State Pension 'Triple Lock'. In: SPERI British Political Economy Brief. UNSPECIFIED. Sheffield Political Economy Research Institute (SPERI).

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Abstract

Concerns about increasing costs and inter-generational unfairness have made the state pension ‘triple lock’ increasingly controversial. However, the popularity of the policy with voters (since it was introduced by the coalition government in 2010) means that political parties have been reluctant to advocate its abolition. In this Brief, the Sheffield Political Economy Research Institute explores the merit of the criticism the triple lock attracts by considering the policy’s long-term impact on state pension outcomes; in short, the triple lock is assessed as a pensions policy, not simply a pensioner policy. The analysis places the triple lock within the context of the wider operation of the UK state pension system for different age groups, after comparing the UK state pension system with those of other developed countries. The Brief argues that the triple lock helps to nudge the value of the state pension towards the OECD average – albeit arguably far too slowly – and considers, finally, other policy options that might mean that the same goal can be achieved in a more fiscally sustainable manner.