What Labour’s State Pension reform plans imply for anybody born between 1967 and 1996

Need to know

A money expert has warned that Andy Burnham is getting it wrong over Labour’s proposed triple lock changes to the State Pension

State pension changes: need to know as expert warns PM ‘getting it wrong’

• A financial expert has slammed Labour’s proposed changes to the state pension triple lock, warning the Prime Minister is using the “wrong metric” to reform the system.
• Andy Burnham has announced that if Labour wins the 2029 election, the state pension will no longer rise by whichever is highest of 2.5%, average earnings or inflation from 2030. Instead, it will rise by the highest of inflation and 2.5%, with savings funding a new National Care Service.
• Antonia Medlicott from Investing Insiders argues the government has “kept the wrong part” of the triple lock. She said: “The 2.5 per cent minimum is the part I’d have scrapped. Even in a year when prices and wages barely move, pensions still go up by 2.5 per cent.”
• The expert warns workers in their 30s, 40s and 50s to expect the state pension to be worth just 30% of typical full-time earnings. “That’s a floor, not a retirement plan,” she cautioned.
• Medlicott expressed concern about the National Care Service funding, noting pensioners are being asked to accept smaller rises for a service that “hasn’t been fully paid for yet.” She warned families could still face large care bills despite the changes.
• For current pensioners, the expert offered some reassurance that pensions won’t go down and will still rise by at least inflation or 2.5%. However, she highlighted a looming tax squeeze, with the state pension set to exceed the tax-free allowance for the first time in 2027-28.
• The changes come as 600,000 more pensioners have been pulled into paying income tax since 2021 due to frozen tax thresholds.

READ THE FULL STORY: What Andy Burnham’s State Pension change means for anyone born between 1967 and 1996