DWP confirms plans to ‘change triple lock’ in 2030 – ‘find out how’

0Illustrative image of an older couple managing their finances. (Image: Getty)The Department for Work and Pensions (DWP) has confirmed it is moving ahead with plans to change the Triple Lock from the end of the decade, and has explained how it will work. In a speech at the Labour Party conference in September, the Prime Minister Andy Burnham revealed plans for the state pension to move away from the current triple lock policy. The State Pension is currently uprated in line with inflation, average earnings or 2.5%, whichever is highest. The three-layered protection was brought in by the Lib Dem-Conservative government in 2010, in a bid to tackle pensioner poverty and ensure that the State Pension kept pace with the cost of living and rising wages.

But compounded increases mean the policy is now far more costly than had initially been expected when it was conceived and is rising faster than average earnings. The State Pension is now the largest expense on the UK benefits budget, and various Governments have faced calls to remove one of the uprating components to save money.

Mr Burnham said the savings generated by decoupling the rise from the current average earnings test would help fund his ambitious plan for a National Care Service to alleviate the immense financial strain many older people face in later life.

However, the PM made it clear that the 2024 manifesto commitment to keep the triple lock in place throughout the current Parliament would be honoured, and officials insisted that the state pension will rise by more than the proposed two-lock measure in some years, if needed, to ensure it holds its value relative to earnings.

In his first Budget as Chancellor in late October, John Healey confirmed that the current system would be altered from that date. He said: "The Prime Minister has already announced that from 2030 we will adjust the Triple Lock so that the State Pension rises every year and keeps pace with their earnings and inflation."

He added the move would save around £15billion a year by the end of the 2030s. The DWP confirmed in a post on X last week that from 2030 "we're changing the Triple Lock for the State Pension". The post included a video laying out the new mechanism.

"We're adjusting it so it rises each year by inflation, 2.5%, or the amount needed to maintain its value relative to earnings," the voiceover explained.

"This means the State Pension will keep up with earnings over time, instead of growing faster than them, which it does now.

"Nothing changes until 2030. And the State Pension will still rise every year after that. This adjustment will make a fairer, more sustainable pensions system for everyone."

The Government is planning to pass legislation on it before the next general election, which must be called by August 2029 at the latest. If the Labour Government remains in power, it could then implement the policy.

The full New State Pension for the 2026/27 financial year is £12,548, while the continued freeze on the personal allowance for income tax means it remains at £12,570.

As a result, without another recent Government intervention, many state pensioners would have begun to see income tax eating into their payments when the State Pension is uprated by a further 3.9% in April next year, taking the figure to over £13,000.

However, Mr Healey announced in the Budget a mechanism called the Pension Tax Allowance to help shield pensioners living solely off the State Pension from being pulled into paying income tax.