Britian’s triple lock pension guarantee is costing the government an extra £11 billion a year, a new report has suggested.
A report by the Institute for Fiscal Studies (IFS) said state financial support to pensioners would be 11% lower if the government had not agreed to keep the lock in place.
By 2025, the total additional cost could be anywhere between £5 billion and £45 billion due to the way the commitment is structured.
Under the lock, the UK state pension must rise every April by the higher of either average earnings, inflation, or 2.5%.
Introduced by the Coalition government in 2010, the triple lock was designed to protect pensioners from any steady rise in inflation.
PM Rishi Sunak has said the triple lock will remain in place, with Labour also stating it will stay if the party wins the next election.
Critics say it is onerously expensive and penalises people who are working.
According to the IFS, next week's wage growth figures will set the pension rise for the year ahead as at 8.2%, higher than both inflation and the 2.5% minimum set by the government.
Heidi Karjalainen, one of the report’s authors, said the triple lock makes it difficult for people to know the size of pension they will receive in future while the cost burden could just mean the age to qualify keeps being raised.