Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • October 2015
10

'Triple lock needs to end'

Open-access content Wednesday 21st October 2015 — updated 5.50pm, Wednesday 29th April 2020

The UK government has been urged to get rid of the triple lock pension policy by the Institute of Fiscal Studies (IFS).

2

Paul Johnson, director at the IFS, said triple lock, which guarantees that pensions rise in line with either inflation, wages or 2.5%, whichever is higher, would prove to be "prohibitively expensive". 

Speaking at an event in London, Johnson said the policy would add £15bn to pension costs by 2050.

He also said the government should raise pension age at least in line with longevity so that people live a third of adult life in retirement.

Concerning private pensions, Johnson said the increasing dependence on defined contribution pensions would leave individual savers bearing all the risk themselves. He said risk sharing in pension savings "must be a priority".

He also described the current tax system of private pensions as "chaotic" as changes had been made far too frequently, making long-term planning "impossible".

Johnson said the current generation of pensioners "for the first time have incomes higher on average than the rest of the population" and their income would continue to rise for at least the next decade. 

However, he added things would be "less rosy" for future generations because future state pensions would be less generous, home ownership rates were falling and defined benefit pension schemes were collapsing. 

Johnson said: "We have achieved an astonishing turnaround in the incomes of pensioners over the last three decades, without increasing public spending to levels seen in many other continental European countries. But the longer term future looks very uncertain. 

"Those now in their 20s, 30s and 40s may well end up with lower incomes in retirement than their parents. The focus for policy needs to be on getting private provision right, with more risk sharing, and a rational and stable tax policy."

This article appeared in our October 2015 issue of The Actuary.
Click here to view this issue
Filed in:
10
Topics:
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, 71-75 Shelton Street, London WC2H 9JQ. Tel: 020 7880 6200