Andy Burnham must not touch the pensions Triple Lock – but one big change is essential

Andy Burnham is between a very big rock and a very big hard place. He wants to spend, spend, spend but he has no money to do so. The Prime Minister who cannot stop saying “yes” might soon have to start uttering the N-word.

“No” to dishing out more money on Welfare, “No” to hiking taxes in next month’s budget and “No” to tinkering with the pensions Triple Lock. The last one is particularly important as messing with the pensioner guarantee, or scrapping it, would be a political disaster that would see him kicked out of both No 10’s North and South.

News today that the state pension is expected to top £13,000 a year has reignited the debate about its long-term affordability and generational fairness.

The full, flat-rate state pension is expected to rise by £488 a year in April, based on the latest official earnings figure released by the ONS.

The Triple Lock guarantees that the state pension will increase by either average wage growth, inflation or 2.5% – whichever is highest.

Labour made a manifesto pledge to keep the triple lock until 2029, but economists have warned about the cost of the policy ahead of the Budget – although pensioner groups say many people still face poverty in old age.

Both the Tories and Nigel Farage’s Reform UK have pledged to stick with it until the next election.

The lock was designed to ensure the value of the state pension was not overtaken by increases in the cost of living or the incomes of working people.

Although the state pension age is rising to 67, the cost to the government has risen considerably too. Forecasts suggest state pension spending, already at £154billion this year, could go up by a further £600million a year by 2029-30.

Ruth Curtice, the chief executive of the Resolution Foundation think tank, says the policy is “crazy”.

But many disagree.

Dennis Reed, the director of Silver Voices, says people on the old state pension will only receive an increase of £7 next April.

“The majority of pensioners on the old state pension of £185 per week will only receive an increase of about £7 per week next April, hardly enough to buy two coffees, so all this talk of the Triple Lock ‘ratcheting up’ older people’s living standards is a load of baloney,” he told the Express this morning.

He added: “It is certain that energy prices will rise faster than 3.9% by next year, and food prices look like going the same way. Taken together with council tax and utility price rises in April, older people will again be out of pocket despite the Triple Lock, and pensioner poverty will rise further.

“And we face the double whammy of frozen tax thresholds diluting the value of our Triple Lock increases.

“It is essential that the Chancellor lifts the lower tax threshold in his Budget to provide meaningful cost of living relief to all low income families, including pensioner households on modest incomes”.

However, there is one big issue that Andy Burnham must address. Almost 13 million people receive the state pension in the UK. If it does rise by 3.9%, it would take the flat-rate state pension above the personal allowance of £12,570 and therefore be liable for income tax.

The Labour government – when Rachel Reeves was chancellor – promised that pensioners who rely solely on the state pension would not be required to complete a tax return, nor be chased to pay.

Analysis by consultants LCP suggested that only one in 16 pensioners would benefit if the government kept to its previous pledge, saving about £91 each a year. The majority of pensioners have additional pension income and so pay income tax already.

“The government’s plans to address this point are a mess,” said Sir Steve Webb, a partner at LCP and a former Liberal Democrat pensions minister.