State pension triple lock increases to cost taxpayers an extra £1,200

The cost of the state pension stood at £124bn in 2023 to 2024, according to Office for Budget Responsibility (OBR) estimates.

But this cost is predicted to rise over the next five years.

The state pension could cost the Government £158bn in 2028 to 2029, a £34bn increase – because of the triple lock.

This means around 28.9 million working age tax payers will be stuck with paying an extra £1,176 in tax experts have said.

The growing tax bill is prompting commentators to push for reform of the triple lock system, as a way to ease pressure on public finances.

The growing tax bill is putting pressure on public finances and means taxpayers will be forced to work longer to pay for the increase, they warned.

John O’Connell, chief executive of the TaxPayers’ Alliance, urged the Labour Government to reform the triple lock.

He said: “With the triple lock essentially guaranteeing the long-term unaffordability of the pension system, taxpayers are being continuously hammered to sustain something they will likely never receive themselves.

“If the new Government wants to fix public services while reducing the burden on working people, reforming the triple lock would be an excellent place to start.”

David Denton, of wealth manager Quilter, said: “The new Labour Government is lumbered with the exact same problem as its Conservative predecessor.

“The triple lock is an unsustainable policy but continues to be passed around like a political hot potato despite it having some significant structural problems.”

Concerns have been raised about the sustainability of the triple lock in the long term.

Critics argue that the triple lock is unfair because older adults currently experience higher standards of living than younger people may expect to enjoy in the future, and that it is unfair to expect younger people to subsidise older people’s incomes so much through the triple lock.

Supporters of the system argue the policy helps improve the adequacy of retirement incomes for current and future pensioners.

They note how important that state pension is to those on lower incomes, and that the UK state pension is low in an international context.

Pension spending has risen from two per cent of GDP in the early 1950s to more than seven per cent today.

An ageing population in increasingly poor health is expected to exacerbate the problem.

A wave of retiring Baby Boomers – born between 1946 and 1964 – is expected to push up the pensions bill significantly this decade.