Concerns over the sustainability of the state pension triple lock have continued to grow, after September’s inflation figures confirmed that pensioners are now in line for a "bumper" 4.8 per cent increase under the triple lock in 2026.

Under the triple lock, the state pension increases each April in line with the highest of consumer prices index (CPI) inflation, average earnings growth, or 2.5 per cent.

With CPI inflation remaining at 3.8 per cent in September, and average earnings growth confirmed at 4.8 per cent previously, the "final piece of the triple lock puzzle" is in place, with pensioners now in line for a “bumper” rise.

In particular, the full new state pension is expected to increase to £241.30 per week, or £12,547.60 a year, while the full basic state pension will rise to £184.90 per week.

Hargreaves Lansdown head of retirement analysis, Helen Morrissey, clarified, however, that "these increases are not yet set in stone".

"We will need to wait for the Budget for confirmation," she continued. "This will be another piece of data to be considered as part of the ongoing review into state pension age.

"Recent data shows the number of people living until their nineties – and even longer – has soared and the government needs to consider how to balance the costs of state pension with the burgeoning pensioner population."

A growing cost

Indeed, since the introduction of the triple lock in 2011, the state pension has risen significantly faster than earnings or prices, with analysis from the Institute for Fiscal Studies (IFS) suggesting that, by April 2026, it is expected to be £30 a week, or 14 per cent higher, than it would have been under earnings indexation.

According to the IFS, Spending is now £12bn per year higher than it would have been under that alternative.

There have been calls for the government to consider changes in this area, as the IFS warned that the mechanism “adds a great deal of uncertainty to public finances,” as pension spending is linked to volatile indicators.

“Spending on the state pension is expected to rise by around £80bn in today’s terms by the 2070s. More than half of this increase is projected to come from the triple lock, but because the triple lock ratchets up the value of the state pension in a very unpredictable way, that figure could actually be much higher," IFS senior research economist, Heidi Karjalainen, said.

"Maintaining the triple lock over the long term will have to mean either higher taxes and/or lower spending elsewhere. And this spending pressure would, if left unchecked, come on top of increasing pressure for more spending on health and social care."

Quilter retirement specialist, Adam Cole, agreed, arguing that the triple lock has become a "rigid and costly mechanism that drives government spending on state pensions higher regardless of the wider economic picture".

"While a 4.8 per cent rise will provide welcome reassurance to retirees, it also underlines how expensive it has become to maintain the policy in its current form," he stated.

This was echoed by Aegon pensions director, Steven Cameron, who pointed out that while the Labour Government did commit to retain the triple lock, "we’re fast approaching the Autumn Budget, with the Chancellor already signalling difficult decisions ahead".

"Every 1 per cent increase in the state pension costs around £1.1bn a year for all future years," he noted. "While today’s pensioners are yesterday’s working people, if the government decides to prioritise support for those currently working, could that mean a scaled back triple lock from next April?”

And a changing population

The demographic picture has also strengthened the case for reform, as research from Guiide found that the sustainability of the current state pension system depends on retaining and supporting the nation’s younger workforce.
 
The study showed that the number of working-age people supporting each pensioner will fall sharply over the next 25 years, from 3.5 workers per pensioner in 2025 to just 2.2 by 2050.

This demographic shift, driven by a declining birth rate and an ageing population, is expected to significantly strain national insurance (NI) contributions, which fund the state pension.
 
“Currently there is an excess of NI contributions over NI based benefits. The ratio of benefits to contributions is around 77 per cent," the report stated.

"In 2050, based on the above demographic changes alone, any excess is very likely to be gone, meaning tax rises will be needed and a higher burden placed on workers.”

Cole admitted that, "for now, the triple lock remains politically untouchable", but other avenues of work may force the government to confront the wider issue.

"As Labour embarks on its review of state pension age alongside a broader assessment of pensions and retirement adequacy, this will be one of the most politically sensitive yet economically vital debates it must confront," he stated.

An alternative lever?

The review of the state pension age was also highlighted by Hymans Robertson head of pensions policy and innovation, Calum Cooper, who argued that "the government must develop a clear framework to build confidence in the future of the state pension".

However, he argued that the scope of the review should consider not just cost, but who gets the state pension and whether means testing is appropriate.

“If this review brings clarity on the goal of the state pension, it can shape how, and when, the state pension is funded so it is resilient to an ageing society," he continued. "A move away from the unsustainable triple lock is fundamental.

"Alongside NI contributions, ring-fenced funding could come from pensions tax reform without impacting people’s retirement incomes. If funded in a balanced long-term way this would both improve the UK’s demographic resilience and boost UK investment, which is desperately needed."

The Society of Pension Professionals (SPP) raised similar concerns in its submission on the state pension age review, arguing that, if wider terms of reference, including the purpose of the state pension, had been provided, "this would have enabled more relevant factors to be considered and potentially better outcomes”.

It also warned that while changing the state pension age addresses the affordability of the state pension, it does not tackle wider concerns about retirement adequacy, the savings gap, or broader questions of fairness.

Cooper noted that there are other ways in which the increased cost of the state pension can be tackled, such as automatic adjustment mechanisms (AAM) that are used in other countries such as Germany and Finland.

"If these methods are adopted they must be explained clearly to the public to restore confidence in the state pension and allay concerns," he stated.

However, the SPP said that whilst AAMs would provide for the predictable and automatic implementation of any necessary changes to the state pension age without having to seek political consent, their existence does not eliminate political risk since there will inevitably be pressure to cancel or adjust the automatic change from affected groups.

“Reviewing the state pension age may appear to be a relatively straightforward decision but in truth it is a complex challenge that has far-reaching implications for British society – political, social and of course, economic," SPP legislation committee chair, Shayala McRae, said.

"Although the SPP believes the terms of reference for this review were unnecessarily narrow, we have sought to highlight a range of issues for consideration that we trust prove useful in helping the government to reach the best possible decision.”

Tax concerns on the rise again

The anticipated boost to the state pension has not only prompted concerns over the cost to taxpayers and impact for state pension age changes, but also around the potential tax implications.

In particular, AJ Bell head of public policy, Rachel Vahey, pointed out that if, as expected, the state pension increases to be above the personal allowance of £12,570 in April 2027, then the government will come under increasing pressure to either unfreeze the personal allowance or consider whether it can stand behind its promise to uphold the triple lock for the rest of this parliament.

"Removing the freeze on the personal allowance would come at significant cost to the Treasury at a time when the chancellor’s fiscal headroom is already strained at best, while an overhaul of the triple lock would come with huge political risk before the next general election," she stated.

"Needless to say, it’s a headache Starmer and Reeves could do without ahead of a crucial Budget in November with economic and political pressure building both within the Labour Party and outside of it.”

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