Chancellor Jeremy Hunt has warned of public sector spending cuts and improved economic growth to maintain the state pension triple lock.
An ageing population and two significant state pension rate hikes in 2023 and 2024 have fuelled concern among commentators surrounding the affordability of the UK state pension.
Compared to uprating the state pension in line with average earnings each year, the triple lock itself could cost between an additional £5billion and £40billion per year in 2050 in today’s terms, according to projections by the Institute for Fiscal Studies (IFS).
Speaking at a hearing of the Lords Economic Affairs Committee yesterday, Mr Hunt was asked about the sustainability of the triple lock and state pension age, and whether there would need to be a "reappraisal".
The Chancellor replied: “Both those things are kept under review”.
He told the committee: “The answer is very contingent on how successful we are in delivering the ambitions that I outlined to Lord Blackwell.
Chancellor Jeremy Hunt was asked about the state pension triple lock this week
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“If we are able to run public services more efficiently, if we are able to increase our long-term growth rate, then it is entirely possible we can continue to have the levels of public provision we currently have, and the support for pensioners, and I very much hope that is the case."
Pressed on the matter, he added: “Government policy is to deliver more productive public services and a higher growth rate.
"That's why we are confident we can continue to support pensioners in the way we have been in the past.”
Elsewhere during the event, Mr Hunt was asked about welfare reform.
He said: “We do need to keep looking at welfare reform because it is incredibly destructive to society if, inadvertently and for all the right reasons, a system ends up parking people outside the world of work.”
The Chancellor has pledged to uprate the state pension by 8.5 per cent, in line with the earnings element of the triple lock, from April 2024.
The triple lock is a commitment to increase the UK state pension each year by the highest out of average earnings, inflation and 2.5 per cent.
Both the Conservative Party and Labour Party are reportedly set to commit to the triple lock in their General Election manifestos this year.
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How much will state pension rise to?
The full new state pension rate is currently £203.85 a week.
It will increase to £221.20 per week from April 2024.
The full basic state pension rate is £156.20 per week, and it will be uprated to £169.50 per week from April.