Tony Blair: ‘Outdated and unaffordable’ state pension and triple lock must go
A new system which allows people to access their pensions during 'critical periods' has been proposed by the former Prime Minister's think tank
The pensions triple lock is “outdated” and must go, according to Sir Tony Blair’s think tank.
Listen to this article
The triple lock helps ensure that the state pension increases every April in accordance with whichever is highest: the total earnings growth between May and July of the last year, the Consumer Prices Index (CPI) inflation in September of the last year, or 2.5%.
In a report from the Tony Blair Institute, the former Prime Minister’s think tank called for the system to be scrapped to prevent the state pension from increasing faster than earnings do.
The think tank called the system "outdated, increasingly unaffordable, and too rigid for the way people live and work" because it concentrates state-supported income support at retirement.
Read more: ‘Surprising’ momentum for housing market in April as prices jump to record high
In place of the triple lock, the thinktank has suggested a “lifespan fund” which would provide a flexible model that lets individuals accumulate entitlement through activities including work, caring and study.
Up to 20 years of state-backed support would be offered at the level of today’s state pension, following annual contributions to a notional fund.
This would offer individuals some flexibility, such as letting them access some of their entitlement while still working, which would offer support through “critical periods”, including caring, unemployment or retraining.
Those who choose to access this support would then pay higher national insurance contributions when they came back to work, which would create a "default path to rebuild what they had drawn down".
Tom Smith, director of economic policy at the Tony Blair Institute, told Sky News: "We can't keep pouring money into a system that is increasingly unaffordable."
The number of pensioners will increase from 12.6 million today to nearly 19 million by 2070, according to the report.
Mr Smith urged political party leaders to demonstrate "leadership" to tackle the issue. Both Sir Keir Starmer and Kemi Badenoch have confirmed that they would keep it, and as has Nigel Farage, who said he'd make welfare cuts to do so.