Downing Street Has Not Shown How It Reaches £15bn
The government says the change saves £15bn a year by the end of the 2030s but has published no working. An earlier official forecast of a comparable shift found no significant savings until 2034 and only about £6bn a year by 2040. The care service it is meant to pay for is costed at roughly £18.5bn a year extra by 2036.
The mechanism is more generous than the headlines suggest, which is part of why the savings are slower. From 2030 the pension rises by the highest of inflation, 2.5%, or whatever is needed to keep pace with average earnings growth measured from the day the new rule starts. So earnings still count, just over the long run rather than year by year. The Institute for Fiscal Studies reckons the old lock adds £16bn a year by next year and that the new one would have left spending £9bn lower, while still delivering a 6% real rise had it run since 2010. Against a state pension bill of £154bn, that is a trim rather than a transformation. Rachel Vahey of AJ Bell put it bluntly: “The idea that scrapping the triple lock will bankroll social care on its own is simply fantasy.” Accommodation costs in residential homes are not covered. Watch for a costing before 28 October.