The triple lock has been a boon for state pensioners, lifting millions out of poverty since it was introduced in 2010. The Daily Express has repeatedly defended the mechanism against a growing army of critics, because we know how important it is.
Yet the pledge to increase the state pension each year by earnings, inflation or 2.5 percent, whichever is highest, is proving increasingly controversial.
Pensions will cost the UK £124billion this year, and the total bill is expected to hit £135billion by 2025, heaping more pressure on the Treasury.
Former pensions minister turned later life campaigner Baroness Ros Altmann gives short shrift to those who say we can’t afford this.
She notes that the UK has one of the lowest state pensions in the developed world, and most EU countries pay for more.
Her message is clear: “Of course Britain can afford to pay its state pensions, this is a political choice of priorities.”
Yet she also recognises that it has to remain affordable, and argues that it’s possible to save the state pension while also saving money.
Her solutions may not please everybody. One involves everybody paying more National Insurance contributions.
Another proposes taking the knife to the triple lock.
The Government has tried to cut the bill by repeatedly hiking the state pension age.
Altmann says this has to stop, as it will only plunge more pensioners into poverty. Those with health problems, no savings or caring duties cannot keep hanging on for their pension. “Many more will die before receiving anything at all if state pension age rises are accelerated.”
She also rules out means testing the state pension so that wealthier pensioners get a reduced sum or nothing at all.
“If the state pension is only paid to those with little or no savings, the average worker may reasonably decide not to bother with pension contributions and just spend all their money.”
So with the government deficit continuing to grow, what can we do to make the state pension sustainable?
Altmann’s views may be controversial but urgently need airing.
Currently, workers need 35 years of qualifying National Insurance contributions to get the full new state pension.
Altmann says “this is nowhere near a full working life” and increasing this to 45 years will be “a better and fairer way to control costs”.
In one respect, this is going back to the future. Before 2010, men needed to make 44 years of contributions to get the full basic state pension (women needed 39 years).
Altmann notes that someone who started work at 16 should still have a full NI record by age 51, or 56 if they start at 21.
Those who fall short could top up their entitlement by making voluntary contributions, raising money for the Exchequer.
She also proposes rolling all universal pensioner benefits into a higher state pension, which would make them taxable.
The state pension is lower than the £12,570 personal allowance but does count towards total taxable earnings. Adding Winter Fuel Payments would see the better off paying tax on them. “They are worth far more to well-off pensioners than others, which seems unfair and is hardly a sensible use of taxpayer resources,” Altmann says.
Finally and most controversially, Altmann suggests downgrading the triple lock to a double lock by ditching the 2.5 percent uplift, which she says has turned in to a “political gimmick”.
She says: “A double lock, which ensures the state pension keeps up with rising prices or earnings, is fairer and would save money in the long-run too.”
Altmann claims that these measures will make the state pension sustainable without undermining it. Not everyone will agree but it might just be our last chance and it’s better than forcing us all to work until we drop.