Burnham sets out plan to reform triple lock to pay for social care

Maike Currie, vice president of personal finance at PensionBee, said: “The triple lock will become a double lock. From April 2030, the earnings element will disappear, leaving the State Pension to rise by the higher of prices or 2.5 per cent.

“Burnham says the State Pension will retain its value relative to earnings over the longer term, but without official earnings figures in the annual uprating formula, we need to understand how that commitment will work in practice.

“With inflation already above the Bank of England’s two per cent target and vulnerable to external shocks such as higher energy and oil prices, an inflation-linked double lock could still prove expensive if no cap or control mechanism is in place.

“This is ultimately a trade-off: pensioners giving up the protection of the earnings element of the triple lock in return for greater protection from potentially catastrophic care costs. The State Pension is the foundation of retirement income for millions, while the unpredictable cost of care can quickly eat into pensions, savings and housing wealth built up over a lifetime.

“The personal is political, and for Andy Burnham the social care crisis is deeply personal. He spoke movingly about his grandmother, his late father and the care workers who looked after him, describing a system that has too often been invisible to the political class.

“Today he has put a price on trying to fix it. The triple lock will be honoured for the remainder of this Parliament, but the savings from moving to a double lock will help fund a National Care Service – an ambition Burnham compared in significance to the creation of the National Health Service.

“There is also the issue of tax. As the State Pension moves closer to the Personal Allowance, it makes little sense to give pensioners an increase with one hand only to claw some of it back in income tax with the other. The commitment that those on the lowest incomes will not be dragged into paying tax is therefore important.”