A former DWP minister who helped bring in the triple lock has spoken about the new rules
Former pensions minister Sir Steve Webb has explained what the Government’s upcoming changes to the state pension triple lock will mean for future payments. He provided some calculations saying payments will rise by “less than they would have done”.
Under the current policy, the state pension increases every April by whichever is highest: average earnings growth, price inflation, or 2.5 per cent. Prime Minister Andy Burnham announced that starting in 2030, the average earnings figure will be removed, keeping only the 2.5 per cent and inflation links. The PM set out in his Labour Party conference speech that the Government would “adjust” the triple lock policy, from April 2030. Mr Burnham said that the state pension will still “hold its value relative to earnings over time, so that pensioners will always share in the rising prosperity of the nation”.
State pension increase plans
Speaking on the BBC’s Money Box show, Sir Steve—who helped introduce the triple lock when it took effect in 2011—explained how the new rules will work in practice. He said: “Every year pensioners will definitely get [an increase in line with] inflation, so that’s if prices go up. And if that’s a very low number, they’ll always get 2.5 per cent.” He went on to talk through how the earnings link will work in future.
The former Government official said: “There’s a third leg sort of lurking, which is that they will always keep the pension a certain share of the average wage. So say, in round numbers, it’s 30 per cent of the average wage now, it will never dip below that.
“So as years go by, the pension will always be at least that 30 per cent. So, if people’s wages are growing over time, so will the pension.” As payment will still be moving upwards after 2030, Sir Steve said the new policy is perhaps not as harsh as it first appears.
He said: “So it’s not quite as draconian as it sounded. It will save the Government money, that’s partly why they’ve done it, but it’s not like going back to the ’80s and ’90s when it was just price inflation.”
£1,000 a year change
When asked how much less claimants will receive compared to the old rules, Sir Steve outlined the long-term impact on payments. He said: “Pensions will still go up every year, at least 2.5 per cent every year, but over the coming years by less than they would have done, and that’s where these billions of pounds of savings come from.
“So, in cash terms by 2040—so, a decade after they start the policy—pensions will be about £1,000 a year per pensioner lower than they would have been. They’ll still be higher than they are now, but they won’t rise by as much.”
Other key state pension changes
People planning for their retirement may want to note some other changes coming in for the state pension. These include
- State pension age: The qualifying age is currently rising from 66 to 67. This is happening in a gradual process that began in April 2026 and will finish by April 2028.
- Tax exemption: A new policy will soon be put into legislation so people whose only income is the full state pension will be exempt from paying income tax on their payments. Further details about how this will work are set to be announced at the Autumn Budget 2027.
