These short essays should not be read as explicit policy recommendations, but rather as a set of provocations in terms of what is possible.

The triple lock mechanism was implemented in 2011 to increase the value of pensions yearly. Under this rule, pensions increase by the highest of either the inflation rate, average weekly earnings growth or 2.5%. The triple lock was introduced to reduce elderly poverty rates and income inequality, but it hasn’t worked and is no longer financially tenable.

Although the triple lock ensured that pensions kept up with the cost of living, it failed to eradicate elderly poverty. A package of reforms to both the triple lock and to Pension Credit could save the government £5-12 billion per year while reducing pensioner poverty.

Finding a socially acceptable way to uprate pensions is difficult. In 2011, the UK chose to adjust the state pension using the triple lock, where pensions had previously been uprated against inflation only. Under the triple lock, the state pension is uprated by whichever is the highest of: inflation, average weekly earnings growth or 2.5%. The triple lock was intended to respond to the rise in elderly poverty in the 1990s - in 1994 28% of pensioners lived in poverty, only just below the rate for children. At that time, inflation was low, but wages were growing much faster, so uprating pensions in line with inflation alone produced only modest annual increases. Year by year, pensioners fell further behind the living standards of the working population. The triple lock was designed to end this: it guaranteed that pensioners would never get poorer in real terms (the inflation link), would share in rising national prosperity (earnings), and would never get a derisory cash increase in year where both inflation and wage growth were low (the 2.5% floor).

You might say that the triple lock has done its job, as the standard pension has seen a significant real-terms increase, lifting many pensioners out of a cost of living crisis and closing the median income gap between pensioners and workers (see below).

Or has it? The triple lock has failed to eradicate elderly poverty, and frequent supply shocks to the economy - from the pandemic to the war in Ukraine - have at times compensated pensioners twice over, creating a ratchet effect.

After the triple lock was introduced in 2011, relative elderly poverty rose from 13.4%-18.1% in 2020 (see below).

Meanwhile, as we have witnessed several supply shocks over the last decades, pensions have often been uprated twice - first from the inflation surge then from the wage picking up - creating what the Resolution Foundation have called a ‘ratchet effect’.

As a result, the triple lock’s escalating costs place huge pressure on the public purse, its volatility prevents effective budget planning and it isn’t delivering on its intended outcome of tackling elderly poverty.

At £161 billion, the state pension is the second-biggest area of public spending after health and social care - dwarfing defence (£39.1 billion) and comfortably exceeding education (£95.1 billion).

On top of the weight on public spending, spending on the triple lock is unpredictable precisely because of its design. The OBR projects that state pension spending will rise a further £80 billion in the next 50 years, but the range around that (from £40 billion to £120 billion) is huge depending on economic conditions. Governments can't plan long-term finances around a formula whose cost swings by £80bn depending on economic turbulence.

Furthermore, the triple lock is poorly targeted at the actual problem. It raises everyone’s pension, including wealthy retirees, while pensioners in genuine poverty are often those failing to claim Pension Credit, the means-tested top up designed specifically for them. Around 700,000 households are not claiming the Pension Credit despite being eligible. Rather than keeping the triple lock, targeted fixes - simplifying complexity in Pension Credit applications, publicity campaigns, or automatic enrolment could change that.

To tackle poverty, reduce waste and bring back budget stability, the government should move away from the triple lock and consider a dual approach which reforms the uprating mechanism and effectively tackles elderly poverty.

Reforming the uprating mechanism

The government should align retirement policy with minimum wage policy by replacing the triple lock with a new uprating rule, supported by a backstop mechanism and administered by an independent statutory body - mirroring the Low Pay Commission, which sets the minimum wage. This proposal is similar to the ‘smoothed earnings link’ put forward by the IFS and the Resolution Foundation (the latter depicted in the graph below).

Importantly, there should be a guarantee for pensioners: your pension tomorrow will always buy at least what it does today, and it will grow even further as the rest of society prospers. The government should ensure pensions keep up with the cost of living, and guarantee that they never fall too far behind median earnings. Pensions could be insured against relative poverty by being kept above a baseline of 25%-30% of median earnings, a benchmark aligned with the Turner Commission’s adequacy recommendations and OECD standards. Just look at Australia, which set that threshold at 41.76% of national pre-tax male total average weekly earnings.

When pensions fall below this threshold, they could be boosted by the highest of either: average weekly earnings growth or inflation to catch up. Once safely above the threshold, pensions will lock in their value by rising with inflation, with a minimum 2% floor to protect retirees during periods of low growth.

The graph below presents the weekly basic state pension under various scenarios: the triple lock, the double lock, a smoothed earnings link, the Australian system and an average weekly earnings growth indexation. The triple lock curve shows the weekly basic state pension under the current system. The double lock curve shows the value of the weekly state pension if indexed on CPI and average weekly earnings growth only. The smoothed earnings link curve is the proposal made by Resolution Foundation. The average weekly earnings curve is if the pension is indexed on average weekly earnings growth only. Finally, the Australian system is our proposal - taking a ratio of basic state pension to median earnings of 25%.

To keep the process objective, fair and transparent the Government could give the Pensions Commission the remit to set the level of the state pension each year, taking into account the current external conditions, likely impacts on the economy, elderly poverty rates and retirement system.

This would align the remit of the Pensions Commission with the Low Pay Commission, which is mandated to evaluate the adverse effects the minimum wage has on the economy - something that the Pension Commission does not have. The Pension Commission is currently only tasked with improving retirement outcomes, without any consideration for the adverse effect on the economy. Changes could also be phased in with a grandfather clause, meaning workers close to retirement would stay on the existing rules.

Reforming the state pension to a double lock, uprating on CPI only, or uprating on average gross earnings are less desirable options than this proposal. A double lock would be subject to the same ratchet effect as the graph above shows. Uprating on CPI only may still lead to disparities in times where wage growth outpaces inflation, while uprating on average weekly earnings may not be appropriate in times of crisis.

If implemented, the pension reforms recommended here could save the government between £5 and £12 billion a year - savings that could be put to work in several ways.

Most directly, these savings could go towards alleviating poverty in our most vulnerable communities. Both child and pensioner poverty could be addressed - disposable incomes for families with children have stagnated, leaving child poverty rates stubbornly unchanged since 2005. They could also be redirected towards energy efficiency, adult social care reform, or capital investment in housing (including in temporary accommodation to close asylum hotels). Importantly, these savings could also free up some fiscal space in order to lower borrowing costs. Gilt yields are at high levels, and have ripple effects on individuals' borrowing rates, so getting borrowing costs down could have positive effects on the cost of living crisis.

Reforming Pension Credit

Alongside reforming the uprating system, the government could do more to support pensioners facing financial hardship. Many pensioners do not claim Pension Credit - the top-up financial assistance for pensioners - despite being eligible. Lack of information, a heavy administrative burden or shame are often cited barriers to adoption. The government could ease these barriers by introducing systematic rules. For example, if your tax return is below the eligibility threshold, you could automatically receive a letter to claim. Judging from the estimates, if those 700,000 eligible did receive Pension Credit, poverty could be brought down from 14%-9%. A more ambitious move would be to automate enrolment for eligible pensioners. The government could mandate DWP, HMRC and local authorities to link data to facilitate this, under the Data (Use and Access) Act 2025. Technically, this would involve linking HMRC’s real-time income tracking to the DWP database and using local housing benefit records to identify and auto-enroll eligible retirees. Again, the fiscal room unlocked from the state pension reform could be redirected towards enabling this.

The triple lock was built to rescue pensioners from the poverty of the 1990s, but never truly met its purpose. Today it survives not because it is good policy, but because no government has dared touch it. The politics are tricky - pensioners vote, and changes will be pitted against that electoral mandate. But the economics are no longer tenable. A mechanism that ratchets upward with every shock, on a spending line already second only to health, while doing little for the poorest pensioners, is not a system worth defending. The alternatives exist: keeping the state pension above 30% of median earnings, with a more functional backstop and a statutory body to ensure fairness, plus serious effort to get Pension Credit to those who need it. Picking this lock will take political skill and careful communication. But it can be done, and the longer we wait, the more expensive the failure becomes.