Triple lock pension policy must be reformed, says top economist

The state pension’s triple lock guarantee needs urgent reform, according to a prominent economic adviser who recently declined an offer to join Downing Street’s policy team — a decision that has given him unusual freedom to speak bluntly about one of British politics’ most untouchable subjects.

The economist, who advised the Treasury on fiscal sustainability over the past three years, argues that the triple lock — which guarantees the state pension rises each year by whichever is highest among inflation, average earnings growth, or 2.5 percent — is no longer affordable and is quietly draining billions from public finances that could go elsewhere.

The cost is becoming impossible to ignore

Last year alone, the triple lock added roughly £11 billion to the pension bill beyond what a simple earnings-linked rise would have cost. The total annual state pension expenditure now sits at over £110 billion, making it by far the single largest item in the welfare budget. And it’s growing every year.

The adviser’s position is that the 2.5 percent floor should be scrapped first. That’s the element he describes as hardest to justify — a guaranteed minimum increase with no real economic logic behind it, introduced in 2010 largely as a political sweetener.

“There’s a serious conversation this country needs to have about intergenerational fairness,” a senior policy official familiar with the discussions told us. “Nobody wants to be the one who says it out loud, but the numbers don’t lie.”

Why he turned down No 10

The adviser was reportedly offered a senior role inside Number 10 earlier this year but walked away from the position, citing concerns about the government’s willingness to tackle long-term structural issues rather than manage short-term political cycles. He didn’t give specifics publicly, but those close to him say the pension question was central to his frustration.

It’s a telling moment. Turning down Downing Street isn’t something economists do lightly.

His broader argument is that Britain is effectively borrowing from younger workers and future generations to protect a benefit that, in its current form, disproportionately benefits wealthier retirees. Pensioners in the top income quintile gain just as much in cash terms as those at the bottom — which he calls a fundamental design flaw.

What reform might actually look like

He’s not calling for cuts. The proposal is more surgical than that. Retaining the earnings link as the primary mechanism, removing the 2.5 percent floor, and means-testing any above-inflation increases for higher-income pensioners. Australia and the Netherlands have both moved in similar directions over the past decade with measurable results.

So far, neither Labour nor the Conservatives have shown appetite for opening this particular door. Both parties fear the electoral consequences among older voters, who turn out in far greater numbers than the young.

But with the UK’s old-age dependency ratio projected to hit 40 percent by 2050, that reluctance may not be a luxury either party can afford much longer.