🧓Pensions
Pension Triple Lock
Upfront
+£50m
Annual
-£15.5bn
Revenue
£0m
Net Annual Effect
-£15.5bn/year
Payback in 1 years
GDP +0.05%low uncertainty
2 sourcesOBR-endorsed
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Pensions
Pensions & Retirement
Undersaving
43% of workers
Median Pot
£48-57k (need £489k)
Triple Lock Cost
£15.5bn/year by 2029
35%Current
Potential: 65%
✗Key Problems
- 1.Triple lock £15.5bn/yr - pensioners got 8.5% while workers got 0%
- 2.43% undersaving - £48-57k pot vs £489k needed
- 3.State pension age 66 but life expectancy 81 - maths broken
- 4.Pensioner households now RICHER than working households
✓Solutions
- 1.EARNINGS-LINK ONLY: Replace triple lock, save £15.5bn/yr (pre-2011 norm)
- 2.ALIGN PENSION AGE to longevity: 68 by 2030, 70 by 2040 (Denmark model)
- 3.TARGETED BENEFITS: Means-test universal pensioner benefits (New Zealand model)
- 4.AUTO-ENROL at 12%: Adequate savings mandate (Australia model)
🔬
Analysis
Root Causes
1
Triple lock £15.5bn/yr - pensioners got 8.5% while workers got 0%
2
43% undersaving - £48-57k pot vs £489k needed
3
State pension age 66 but life expectancy 81 - maths broken
4
Pensioner households now RICHER than working households
Reform Pathway
1
EARNINGS-LINK ONLY: Replace triple lock, save £15.5bn/yr (pre-2011 norm)
2
ALIGN PENSION AGE to longevity: 68 by 2030, 70 by 2040 (Denmark model)
3
TARGETED BENEFITS: Means-test universal pensioner benefits (New Zealand model)
4
AUTO-ENROL at 12%: Adequate savings mandate (Australia model)
Cascade Effects
Reforms in Pensions & Retirement will have downstream effects on 2 connected domains:
Policy Costings
Rigorous fiscal analysis of Pensions & Retirement reforms
⚠️
CONTESTED ESTIMATE
Significant methodological disputes. View caveats below.
🧓Pensions
Accelerated Pension
Upfront
+£100m
Annual
-£22.0bn
Revenue
+£2.5bn
Net Annual Effect
-£19.5bn/year
Payback in 1 years
GDP +0.15%Productivity +0.05%very high uncertainty
UNCERTAINTY RANGE (Annual Net Effect)
Most Pessimistic
-£26.0bn
⟷
Most Optimistic
-£10.0bn
⚠️
MAJOR CAVEATS
- •Relative poverty measure misleading: pensioners have highest median wealth of any age group (£500k+ for 65-74s)
- •Triple lock has created massive intergenerational transfer: pensioners only group with rising real incomes 2010-2024
- •Pension credit uptake only ~66% - reform should include automatic enrolment for poorest pensioners
- •Political feasibility is genuine constraint: 75% pensioner turnout vs 47% under-30s creates democratic distortion
- •Demand effects likely overstated: pensioners have low debt, high assets, can draw down wealth
- •Status quo cost: triple lock projected to consume entire fiscal headroom growth to 2070
- •Reform sequencing matters: increase pension credit take-up before or alongside triple lock changes
4 sourcesOBR-endorsed
