Tony Blair’s Thinktank Urges Reforms in UK Pension System

The Tony Blair Institute (TBI) has urged the Labour party to reconsider its commitment to the pensions triple lock, citing the need for a more sustainable system due to Britain's ageing population.

The triple lock, introduced in 2010, guarantees that the basic and new state pensions will rise every April by whichever is highest: inflation, average wage growth or 2.5%. However, the TBI argues that this policy has become unaffordable, adding billions of pounds to annual government spending.

As the UK's population ages, the cost of the policy is expected to increase, with the TBI predicting that total state spending on pensions will rise from 5% of gross domestic product to 7.8% by 2070. This, they claim, would require higher taxes, deeper pressure on other public services, or both.

The TBI is proposing a new 'lifespan fund' that would replace the basic and new state pensions. Under this scheme, individuals would contribute to a notional fund that would provide up to 20 years of support, allowing for more flexibility and personalisation.

Thomas Smith, director of economic policy at the TBI, said: 'Britain's state pension system was built for a different era. We can't keep pouring money into a system that is increasingly unaffordable. Pension spending must be contained and that means the triple lock cannot continue after the next election.'

A spokesperson for the Department for Work and Pensions responded that supporting pensioners was a priority and that the commitment to the triple lock would continue for the rest of the parliament.