Gaby Hinsliff (Britain needs cash and everyone knows we should break the pensions triple lock. Where is the courage?, 22 September) is right that public policy should not subsidise wealth without limit, but breaking the triple lock is a poor way to target affluent pensioners. Most pensioners are not affluent. Indeed, a quarter of pensioners require benefits in addition to the state pension just to survive and keep a roof over their heads.
If the aim is to stop subsidising wealth, a more direct target is the generous tax treatment of private pension savings. A taxpayer contributing £100 to a pension can receive £40 or £45 in tax relief if they pay higher- or additional-rate tax, compared with £20 for the basic rate. Tax and national insurance contributions relief on private pensions costs the government a staggering £84bn a year.
Most of this money (almost three-quarters) goes to the wealthiest 20% taxpayers because they can afford to save the most and receive the highest rate of relief. Instead, a flat 20% rate of tax relief on private pensions would preserve the incentive for basic-rate taxpayers while reducing the additional subsidy concentrated among higher earners. It’s also fair because when pensions are drawn down, much less tax is recovered by the Treasury, making the net cost of this relief over £50bn a year.
This could raise billions more than breaking the triple lock. The triple lock’s 2.5% floor was only significant during the period when both earnings growth and inflation were close to zero. When inflation and earnings growth are above 2%, as they are now and are expected to be over the coming years, the difference between the triple lock and a conventional uprating mechanism becomes irrelevant.
The policy challenge therefore is to avoid the economically irrelevant, politically damaging and socially divisive red herring that is breaking the triple lock and instead reform the far more regressive support given to large private pension pots.
Stephen Richardson
Grange-over-Sands, Cumbria
Gaby Hinsliff makes the point that retirees of the future are likely to have smaller cushions to fall back on than baby boomers. But it is precisely this that justifies maintaining the triple lock as a bulwark against poverty. Young and middle‑aged workers do indeed face the prospect of an impoverished old age. As highlighted in the Pensions Commission interim report, according to 2025 figures, 43% of working-age people are undersaving for retirement, with just 25% of Bangladeshis and Pakistanis of working age participating in a pension scheme.
The pensions crisis is likely to grow, given the rise in the numbers of self-employed people – the group least likely to be saving for a pension. Millions of workers in their 40s and 50s face the prospect of poverty in retirement, given the rise of precarious working and continuing age discrimination in employment.
We do need a new deal to achieve generational fairness, but breaking the lock will leave millions facing poverty. The alternative must be keeping the lock, but tackling the reasons that justify its existence – low incomes, insecure employment and the high cost of housing.
Chris Phillipson
Emeritus professor of sociology and social gerontology, University of Manchester
There is a simple tweak that would improve the affordability of the triple lock. The goal of the triple lock is to ensure that the value of the pension keeps up with both price inflation and wage inflation. But the way it has been implemented allows pensioners to do much better than this.
Between 2011 and 2026, prices rose by 60% and earnings rose by 66%, but pensions rose by 89%. This happens because in some years prices rise more than wages, but in other years wages rise more. So the pension does better than both of them.
The fix is to smooth out the earnings link. Instead of looking at wages growth over the last year, we should look at growth over the past five years, for example. Pensioners would still be protected against price rises, and would maintain their current position in the wages league table. But they would no longer rise up it.
Bob Vickers
Twickenham, London
Gaby Hinsliff claims that “Every serious party needs billions of pounds to fund their promises, and everyone knows there’s an obvious place to find the money, but nobody wants to be the first to say so. And so a deferential silence shrouds the pension triple lock.” The problem is that everybody might think they know this, but that does not mean it is right.
If we do need to find money, it is within the government’s power to create it. And if it refuses to use that power, it can look elsewhere within the pension system for funds. For example, the pension tax relief given to the highest-earning people in this country, at rates above the basic level of income tax, costs at least £15bn a year – vastly more than costs attributed to the triple lock.
We have a cost of living crisis and a pension poverty crisis. So why is everyone looking at punishing some of the most vulnerable people in our society when the rich continue to have their ever-increasing wealth subsidised by the state at a cost of many billions of pounds a year?
Richard Murphy
Emeritus professor of accounting practice, Sheffield University
Along with my state pension, I receive two small pensions from the Ministry of Defence and the NHS. If my husband should die before me, I don’t know how I would survive financially. We have a small cottage and downsizing wouldn’t result in a significant profit.
My “inheritance” from my parents disappeared when my mother had to go into care with Alzheimer’s; her house had to be sold to pay for her care.
In a week when the billionaire tax avoider Jim Ratcliffe badmouths the country, Gaby Hinsliff makes no reference to the tax system and how the very rich can get away with paying very little.
She also makes no reference to why the UK is doing so badly financially or why young people are struggling – my son can’t afford a house – after a decade of Tory misrule, a decade of Brexit wilderness and the legacy of Thatcherism. Removing the triple lock won’t solve the now endemic financial challenges the UK is facing.
Ingrid Marsh
Newton Abbot, Devon
Gaby Hinsliff is right about the triple lock: it has done its work in raising the ratio between the state retirement pension and average earnings from 18% in 2010 to about 30% now. Two problems remain: what should replace it and how to stop an opportunist opposition from playing politics with the issue?
There is no need to decide this matter now. Far better to announce the end of the triple lock in the forthcoming budget and refer the question of a replacement to a time-limited, cross-party commission. The state pension should not become a political football or part of a short-term fiscal fix.
David Purdy
Causewayhead, Stirling
