Labour's triple lock shake-up could cost pensioners £688 a year

Labour's triple lock shake-up could cost pensioners £688 a year Labour's proposed double lock would see pensions increase by either Consumer Prices Index (CPI) inflation or 2.5 per cent Sign up to the Money Newsletter Email address Sign up I agree to receive updates and information about my account, the GB News Community, and related products and services from GB News. By signing up you agree to the Terms and Conditions and Privacy Policy and Community Rules. Thank you for signing up! See the latest from GB News here . Choose GB News on Google - add us as a preferred source Choose GB News Support GB News Champion free speech and independent journalism while unlocking exclusive benefits. Support us Millions of pensioners could miss out on hundreds of pounds a year under Prime Minister Andy Burnham's plans to replace the State Pension triple lock from 2030. Those receiving the full new State Pension would be £688 a year worse off today if the proposed double lock had been introduced in 2010, according to analysis by Bob Tronson, head of pensions at InvestEngine. The findings highlight how much retirees could lose out on in future pension increases if the Government removes the link between State Pension payments and average earnings growth. Under the current triple lock, the State Pension rises each April by whichever is highest of inflation, average earnings growth or 2.5 per cent. However, Mr Burnham announced at Labour's conference in Liverpool last month that the system would change from 2030 to help fund adult social care reforms in England. The proposed double lock would see pensions increase by either Consumer Prices Index (CPI) inflation or 2.5 per cent, whichever is higher. Average earnings growth would no longer be part of the annual calculation. Mr Burnham pledged to maintain the existing triple lock until the end of this Parliament. He told delegates: "That promise will take the State Pension to a record high. In April 2030, we will adjust it." The potential impact is significant for pensioners who rely on the State Pension to cover their everyday living costs. Mr Tronson calculated that someone receiving the full new State Pension would be £688 a year worse off today if the double lock had replaced the triple lock in 2010. Mr Burnham pledged to maintain the existing triple lock until the end of this Parliament | REUTERS Those receiving the older basic State Pension would be £560 a year worse off. The difference reflects the importance of earnings growth in determining pension increases over the past decade. Since the triple lock was introduced in 2011, the State Pension has increased by 89 per cent. By comparison, increases based solely on earnings or inflation would have delivered growth of 66 per cent and 60 per cent respectively. The warning comes as the Office for National Statistics confirmed that September's annual CPI inflation rate stood at 3.5 per cent. How the state pension triple lock has changed over the years | GB NEWS / FIDELITY INTERNATIONAL Average earnings growth for May to July was higher at 3.9 per cent, meaning the earnings measure is set to determine next April's State Pension increase. Mr Tronson said: "Today's Consumer Price Index figures of 3.5% confirm what many people expected: next year's State Pension increase is likely to be determined by the earnings metric (3.90%)." For the 2027/28 tax year, the expected 3.9 per cent increase would take the full new State Pension from £241.30 to approximately £250.70 a week. That would give pensioners receiving the full amount £13,036.40 a year. Meanwhile, those receiving the full basic State Pension, which applies to people who reached State Pension age before April 2016, could receive approximately £192.10 a week, equivalent to £9,989.20 annually. Triple lock to stay for Parliament, pensions minister confirms | GETTY Further analysis from the Institute for Fiscal Studies (IFS) suggests the proposed changes could significantly reduce Government spending on pensions. The think tank estimates that if Mr Burnham's double lock had been in place since 2011, annual State Pension spending would now be £9billion lower. However, pensions would still have increased by around 75 per cent over that period, representing a real-terms rise of approximately 6 per cent. Jonathan Cribb, deputy director at the IFS, said: "For pensioners, the reform means that state pensions will still rise in real terms over time but more slowly than under the current system, and in the long run their pensions will keep pace with growth in employees' average earnings." Mr Tronson warned that removing the earnings element could make it harder for future retirees to rely on the State Pension alone. He highlighted that earnings growth has determined most annual State Pension increases since the triple lock began, including two of the three largest uplifts. Among these was the 8.5 per cent increase in 2024. Mr Tronson said: "Moving to a double lock will make it even more important for those still in work to start building their own retirement savings early, whether through a workplace pension or self invested personal pension (SIPP), rather than relying on the State Pension alone." A DWP spokesman said: "This settlement is a better deal for pensioners and their families and ensure the state pension system rises every single year by at least the highest of 2.5%, CPI inflation or a new earnings link. "We are committed to the triple lock for the rest of this parliament, which will see the new state pension rise by over £2,000 and reach a forecasted record high by April 2029. The adjusted triple lock will build on the gains the policy has made for pensioners." Our Standards: The GB News Editorial Charter Money Council tax arrears rise by £1,500 every minute as debt crisis deepens Exclusive Money Autumn Budget 2026: What John Healey could announce for pensions, savings and household finances Money Is inflation eating into your savings? 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