Arabic version: خطة بورنهام للقفل الثلاثي تشير إلى تحول طويل الأمد في المعاشات

According to BBC News, Prime Minister Andy Burnham has set out plans to replace the existing pensions triple lock with what the government calls an “adjusted triple lock” after the general election. The proposal is a significant political move, linking changes to the state pension with funding for a new national social care service.

Under the plan, the state pension would rise by either the rate of price increases or 2.5%, whichever is higher. This would retain annual increases and protection against inflation. However, the annual link to growth in average earnings — currently the factor setting the increase under the triple lock — would be removed.

Instead, the policy would seek to maintain the state pension as a share of earnings at the record level it is due to reach in 2030. The change would therefore replace the annual earnings guarantee with an approach intended to reflect earnings growth over time. Ministers and MPs will have to defend the policy publicly, and MPs will eventually need to vote on changing the historic annual earnings link.

The Institute for Fiscal Studies said that if Burnham’s proposed change had been in place since 2011, it would have more than halved the annual £16bn cost of the triple lock, saving £9bn every year. Government sources said making the change now would save around £15bn a year by 2040, although the savings would be smaller in the next few years.

The announcement also raises wider questions about the government’s ability to take long-term decisions. BBC News reported that the prime minister had been advised that bond markets could welcome a UK government willing to make difficult choices. Further policy moves on energy and post-Brexit issues are expected following the speech.