Burnham: Pension triple lock to change in 2030 to pay for care service
The prime minister said the shift would let older people avoid paying care costs out of a state pension that is little more than the basic rate.
Prime Minister Andy Burnham has set out plans to change the state pension triple lock from 2030, using the savings to help fund a new national care service in England.
Burnham announced the change in a Labour Party conference speech delivered in Liverpool — Burnham’s first conference speech as prime minister. Under the plan, the state pension would continue to rise every year by at least inflation or 2.5%, but the current link that guarantees a rise in line with average earnings each year would be removed.
Burnham said: “The state pension will continue to rise every year at least by prices or 2.5%. And it will hold its value relative to earnings over time so that pensioners will always share in the rising prosperity of the nation. But this change will generate significant savings which we will use to build up our national care service.”
The triple lock guarantees the state pension rises each April by whichever is highest of inflation, average earnings growth or 2.5%. Burnham’s plan would keep the inflation and 2.5% floor but track earnings only over a longer period rather than matching every annual rise.
“Some may not realise it but older people with nothing more than the state pension, or only a little more, can find themselves paying care changes today from that small income,” Burnham said. “Under my plan, this will no longer happen.”
Officials have suggested the change could save £15bn a year by 2040. Burnham described the planned national care service, which would offer free social care at the point of use, as a “landmark” policy that would be “as significant as the creation of the NHS itself”, and said it would be “fully funded and not through borrowing”.
Jonathan Cribb, deputy director at the Institute for Fiscal Studies, said savings from the pension change “are likely to be relatively small in the first few years, but rise substantially over time”, and that “we should not expect this reform to save enough that it could fund universal social care in the next parliament”.
Sharon Graham, general secretary of the Unite union, told the BBC the government should have “pulled another lever”, such as a wealth tax, rather than changing the triple lock.
Conservative leader Kemi Badenoch said “more tax rises are inevitable” under Labour’s plan. Reform UK leader Nigel Farage accused Burnham of “launching an offensive against our elderly”. Liberal Democrat leader Sir Ed Davey said families “cannot wait until after another election and it can’t be funded from the pockets of our poorest pensioners”.
Burnham spoke for more than an hour, pausing at times while referring to Roy — Burnham’s father, who died earlier this month. Burnham accepted the pension change may carry “a political price”, arguing “someone has to go through the pain barrier and rip the plaster off”.