Triple-lock: Call for pensions policy to be revamped

One of the key figures behind the introduction of the triple-lock pension policy is calling for its revamp.

Steve Webb, pension minister from 2010 to 2015 and now a director at mutual insurer Royal London, has proposed a "middle way" on state pension policy.

The triple-lock sees the state pension rise in line with wages, inflation or by 2.5% - whichever is highest.

However, it is becoming increasingly expensive to maintain and some have called for it to be scrapped.

A recent review by former CBI director-general John Cridland, who was appointed as the government's independent reviewer of state pension age last year, recommended that the triple lock be withdrawn in the next Parliament.

The Conservatives have not committed to maintaining it.

The Labour Party has said it will keep the policy in place through the next parliament.

How much does the triple-lock cost?

Labour pledges to keep the triple-lock

In his report for Royal London, Mr Webb proposed that the government retained the triple-lock for pensioners who retired before 6 April 2016.

Those retiring after that date would have their pension increases linked to earnings only. The report said the move would save almost £3bn per year by 2028.

It also said that, as newly retired pensioners are on average £100 per week better off than those aged over 75, the policy would increasingly target money on the older, poorer group.

"There's a big difference between pensioners who retired 20 years ago... for whom the state pension really matters, and someone who just retired," Mr Webb said.

Mr Webb says his proposals would control costs and give pension increases to those most in need.

"This is the first time that someone has said anything other than scrap it or keep it," Mr Webb told the BBC.

He said the triple lock had delivered "big improvements" to pensioner incomes since 2010, but political parties would be concerned about the long-term cost implications of the policy "on top of increased spending on health and social care associated with an ageing population".

But Tom McPhail, pensions expert at stockbrokers Hargreaves Lansdown, said the plan added a layer of complexity to pension policy.

"It would be better to review the triple-lock; the level of the state pension, which was set too low; and state pension ages as a complete package," he said.

He added: "The challenge has always been how and when to move away from the triple-lock without upsetting a key constituency of voters."