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The State Pension triple lock should be abandoned in favour of more sustainable methods of deciding annual increases, an expert has said. Tom Adcock, a tax accountant, described the policy as an "expensive political relic" amid a stalling economy and the constraints faced by Chancellor Rachel Reeves due to Labour's manifesto commitments. As someone who spends his days analysing numbers, Adcock highlights a figure from the Institute for Fiscal Studies (IFS) as worthy of attention. The IFS suggests that maintaining the triple lock could add more than £45 billion annually to pension costs by 2050 – a significant increase from the current £125 billion out of Britain's £1.2 trillion budget (just over 10 per cent). The triple lock ensures that the State Pension increases each year by the highest of inflation, average earnings or 2.5 per cent. Its original aim was to shield pensioners from poverty. READ MORE: However, Adcock says it has morphed into an expensive political artefact, unsustainable in an ageing society and unfair to younger taxpayers who bear the cost. Here are three reasons why he says it's time to bid farewell to the triple lock and try another approach. Adcock says: "The projections from the IFS are alarming. By mid-century, the triple lock will add more than £45bn annually to the pension bill. Each additional year we retain it, the fiscal adjustment required later becomes steeper and more severe. "As any accountant will confirm, compounding is a potent force. Tying pensions to the fastest-growing measure means the liability escalates annually. Even minor differences like a few tenths of a per cent can quickly snowball when applied to millions of people over decades. "This isn't about penalising pensioners, but we must also shield other generations from an impending crisis. The longer we postpone reform, the more likely it becomes that a future Chancellor will be compelled to make harsh, sudden cuts. It's better to adjust now, gradually and equitably, than to jerk later." "Another significant benefit is that scrapping or easing the triple lock would instantly free up valuable fiscal headroom - money that the Chancellor urgently needs," Adcock writes. "With growth stagnating and borrowing costs still relatively high, even modest savings could provide breathing space for investment in areas such as infrastructure and defence. "A simpler, more sustainable approach, like linking pensions to growth in average earnings, would still safeguard retirees' living standards in line with wage earners across the country. And it would also demonstrate to international markets that Britain can make mature, fiscally responsible decisions. "Stability is perhaps the cheapest stimulus there is – we all appreciate a bit of certainty," he says. "The final reform, and perhaps the most challenging to voice for a politician, is means testing," says Adcock. "Should we genuinely be providing the full State Pension to individuals with substantial private pensions or significant assets? "It may sound contentious, but fairness necessitates the question. The tax system already employs means testing across a variety of benefits, from Child Benefit to student finance. Why should pensions be an exception? "Reforming the system would ensure scarce resources are directed where they're most needed. For many pensioners, the State Pension is a lifeline. For others, it's an unnecessary top-up. "Distinguishing between the two isn't heartless and would significantly contribute to restoring intergenerational fairness in a system that often rewards age over need. "The triple lock was a commendable concept for a different era. However, with Britain's finances under strain and the demographic tide surging, we can no longer afford it. If the Chancellor is serious about responsible growth, pension reform is no longer a luxury." Tom Adcock is a tax partner at Gravita. Get breaking news on BirminghamLive WhatsApp . Join our dedicated community for the latest updates sent straight to your phone as they happen. You can find out more about cost-of-living issues in our Money Saving Newsletter, which is sent out daily via email with all the updates you need to know on pensions , PIP , Universal Credit , benefits, finances, bills, and shopping discounts. Get the top stories in your inbox to browse through at a time that suits you.
