Rachel Reeves must 'replace state pension triple lock' and 'prioritise the young for once' in Budget
Chancellor Rachel Reeves is being urged to "prioritise younger generations for once" in lieu of retirees as part of her fiscal reforms in the upcoming Budget statement on November 26, with the Treasury being told to "replace" the state pension triple lock.The Intergenerational Foundation has suggested three reforms to the tax and pension system which could help the Treasury balance the books, and rewrite the social contract between younger and older Britons.Conor Nakkan, a researcher at the think tank, argued Ms Reeves should use next week's Budget as "an opportunity to put the public finances on a more sustainable footing" without relying on younger generations to pay for the Labour Government's policies.Specifically, Mr Nakkan cited the state pension triple lock as a growing expense on working-age people on behalf of retirees at a time when younger generations have been saddled with austerity.The Chancellor is being called to 'replace the state pension triple lock' | GETTY He shared: "Older people benefited significantly from the introduction of the triple lock on the state pension in 2011. This policy ensures that the weekly rate of the state pension increases each year by the highest of average earnings growth, inflation, or 2.5 per cent. "The latest estimates from the Office for Budget Responsibility (OBR) suggest that the triple lock will cost £15.5billion a year by 2029–30. This is nearly three times higher than the £5.2billion originally forecast at the time of its implementation."Furthermore, he noted that funding for youth services has been slashed dramatically in the last 15 years, which has meant younger people have not been able to benefit from the state as much as pensioners.Mr Nakkan added: "Between 2010 and 2020, local authority spending on youth services was cut by more than 70 per cent in real-terms. By 2023, around 1,200 youth centres had closed and over 4,500 youth workers lost their jobs. How much will the state pension triple lock cost the British taxpayer? | OBR "Research has shown that these cuts have contributed to falling educational performance and increasing rates of youth offending."In his recommendations, the policy researcher called on the Government to put more funding into local council youth services and young peoples' mental health services, as well as abolish the two-child benefit cap.To pay for these proposals, Mr Nakkan suggested Labour remove National Insurance exemptions for investment income and for people above the state pension age.He also urged MPs to explore capital gains tax (CGT) reform to align the levy more with income tax and introduce an allowance for normal investment returns.Controversially, Mr Nakkan called on the Chancellor to replace the triple lock to ensure the state pension's long-term viability for future generations.He shared: "The Government should temporarily replace the triple lock on the state pension with inflation-based uprating for the next five years. Forthcoming research by IF suggests this could save around £8billion per year by the early 2030s. "Once public debt is on a sustainable downward path, an earnings link could be established to ensure the state pension continues to rise in line with living standards in the longer-term."Earlier today, Conservative Party leader Kemi Badenoch asserted that she does not want to scrap the triple lock "now" but said "lets see mess Labour leaves for us".What has the impact of the state pension triple lock been on the public's finances | OBR When asked what a potential Reform government would keep the triple lock, Nigel Farage claimed the issue was up for "open debate" and that keeping the triple lock would depend "on the state of the economy".On whether he has made a decision on the triple lock, he said: "Not now. Nearer the election. Right now they're (pensioners) getting above inflation increases."That doesn't mean they're wealthy. The real worry for many pensioners will be even with modest pensions, this budget could drag them all into the tax system. That'll worry them even more."A Government spokesperson said: "Our commitment to the triple lock is unwavering because we want pensioners to enjoy the dignity and respect they deserve in retirement. This means millions will see their State Pension rise by up to £1,900 over this parliament."
