Prime Minister Andy Burnham has said the Government will legislate during this Parliament to replace the state pension triple lock with a double lock from April 2030, using projected savings to help fund a new National Care Service.
Announcing the policy at the Labour Party conference in Liverpool on Tuesday, Burnham said the current guarantee would remain unchanged until April 2030, fulfilling Labour's 2024 manifesto pledge. He said the change was "about helping pensioners" who were at risk of paying ruinous care costs.
Under the present triple lock, introduced by the Conservative-Liberal Democrat coalition government in 2010, the state pension rises each year by inflation, wage growth or 2.5%, whichever is highest. The system was put in place in 2011 and has become one of the most protected commitments in public spending.
From April 2030, the pension will rise by at least inflation or 2.5% each year. Annual increases linked to average earnings will end, although Burnham said the pension would continue to reflect earnings growth over time. The Government has yet to set out the mechanism for doing so.
"The state pension will continue to rise every year at least by prices or 2.5%," Burnham said. "And it will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation".
Burnham said the adjustment would reduce state pension spending by an estimated £15 billion a year by the end of the 2030s. The projected reduction would reach £50 billion a year by 2050. The Government plans to direct the savings towards a National Care Service, which would provide free personal care for older people.
The service is due to be established in the next Parliament. Burnham said his plans for care that is free at the point of use would be put before voters in 2029. Baroness Casey will advise on how and when the service should be built up, with her report due in summer 2027.
The proposal places a major future spending commitment alongside a change to the pension guarantee. Around three in four adults over 65 are expected to need care and support in later life, while one in seven face costs exceeding £100,000.
Jonathan Cribb, deputy director at the Institute for Fiscal Studies, described the reform as a "great improvement" and said Burnham had "neutered the worst element of the triple lock". Cribb said savings were likely to be relatively small in the first few years before increasing substantially. He also cautioned that the change should not be expected to raise enough to fund universal social care in the next Parliament.
Opponents argued that pensioners would bear an unfair share of the cost. Sharon Graham, general secretary of the Unite union, told the BBC that the Government should have pursued measures such as a wealth tax instead of changing the triple lock.
Conservative Party leader Kemi Badenoch said that any savings from the pension change would fall short of the cost of a National Care Service. She said 'more tax rises are inevitable' under Labour's plan. Kevin Hollinrake, the Conservative Party chair, said the proposal amounted to 'taking money out of the pocket of pensioners and using it elsewhere in the system'.
Sir Ed Davey, the Liberal Democrat leader, said families 'cannot wait until after another election and it can't be funded from the pockets of our poorest pensioners'. Nigel Farage, the Reform UK leader, accused the Prime Minister of 'launching an offensive against our elderly'.
Burnham delivered the announcement in his first Labour Party conference speech as prime minister. His father, Roy Burnham, died earlier this month.
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