Former Pensions Minister Ros Altmann has proposed that the state pension triple lock should be replaced with a double lock from 2020.
Altmann, who resigned from her post last month, stated that the triple lock has “outlived its purpose”, according to the BBC.
Introduced in 2010, the triple lock policy ensures that the state pension rises each year by the highest price of earnings growth, inflation or 2.5 per cent.
In their election manifesto last year, the Conservative party guaranteed that it would extend the triple lock until 2020.
Nonetheless, Altmann noted that while holding the ministerial role last year, she lobbied for the former Prime Minister David Cameron to alter the policy but had been blocked for political reasons.
She added in a recent interview that the cost of the triple lock would become increasingly high post-2020 and that lowering this expense with the double lock policy would enable billions of pounds to be spent on better causes elsewhere.
"The triple lock is a political construct, a totemic policy that is easy for politicians to trumpet, but from a pure policy perspective keeping it forever doesn't make sense,” Altmann said.
"The double lock would still give pensioners much better protection than most other areas of the economy. It is absolutely right that we must protect pensioners, and we should look at a double lock as the best way for the long term to really achieve that."
Intelligent Pensions head of pathways Andrew Pennie said: "Protecting state pension incomes is vital, particularly as the government views the state pension as being sufficient for those without any other pension savings and a natural backstop to the risk of people running out of income under the new pension freedoms.
"The triple lock and the current low inflation economy means that state pensions are increasing at 2.5 per cent per annum and therefore growing in real terms. As Ros points out, over time this can’t be sustainable and why should state pensions grow in a low inflation economy but remain flat in a higher inflation economy?
"Given that inflation and growth in average earnings could become negative, we believe a double lock would be unacceptable and perhaps the triple lock can remain, and is in fact necessary, provided the 2.5 per cent escalation rate is reviewed and better reflects current economic conditions."
Hargreaves Lansdown head of retirement Tom McPhail commented: “The triple lock was never going to be sustainable in the long term and for as long as it exists, it will divert an ever increasing share of government spending towards pensioners, at the expense of the working population. A balance always needs to be struck between protecting the standard of living of pensioners, and not over-burdening taxpayers. There is a strong case for using a dedicated pensioners’ RPI measure for inflation-proofing the state pension, rather than either a triple lock, or the double lock proposed by Ros.”
In respone, No. 10 issued the statement: "The manifesto contains a commitment to protect the triple lock. That commitment still stands."
