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Could changing the pension triple lock pay for Burnham's big social care plan? - Published In his Labour conference speech, Prime Minister Andy Burnham said he would "adjust" the triple lock on the state pension to help pay for a new "national care service" in England from 2030. While his proposed reform is likely to reduce public spending on pensions, analysts say it would be unlikely to save enough money between 2030 and 2040 to pay for comprehensive social care reform. BBC Verify has looked at the key figures. What is the planned triple lock reform? Since it was introduced by the coalition government in 2011, the triple lock has guaranteed that the UK state pension rises each year in line with whichever is the highest of inflation, average wages, or 2.5%. Burnham said that from April 2030, instead, it would only rise in line with the highest of inflation or 2.5%. The prime minister added that "it will hold its value relative to earnings over time". We are still awaiting full details from the government, but the Institute for Fiscal Studies (IFS) think tank, external says the new proposed system would ensure that the state pension rises by whichever is highest of: - inflation - 2.5% - average earnings over time rather than every year The IFS says the key change is that the state pension will not automatically jump up with average wage increases every year, but only broadly track them over a longer period of time. That is important because in some years the triple lock has meant the state pension has risen faster than earnings. "The removal of this permanent ratchet is to be welcomed and marks a substantial step towards a more sustainable and predictable state pension system," the IFS says. The IFS estimates that the present triple lock will increase annual state pension expenditure by £16bn a year by 2026–27, compared with if it had risen in line with average earnings growth since 2011. It says that if the new lock had been in place instead, spending would be £9bn a year lower than it currently is. There is considerable uncertainty about future savings though because the cost of the triple lock is linked to the future volatility of people's earnings and inflation, which are impossible to confidently forecast. - Burnham vows to end existing pension triple lock in 2030 to help fund care - Published8 hours ago - Faisal Islam: Triple lock move is significant, but it's a gamble - Published9 hours ago - Andy Burnham wants to fix social care - what are the options? - Published1 day ago - What is the triple lock and why are people talking about it? - Published9 hours ago Moreover, analysts think it could take more than a decade for the reform to deliver major savings. Earlier this year, the Office for Budget Responsibility (OBR) - the government's official forecaster - analysed how much , externalshifting to just an earnings-linked state pension in 2030 would cost relative to keeping the triple lock. This is similar to what Burnham is proposing. The OBR did not identify any significant savings for the government from such a shift until 2034. And by 2040 the annual saving was estimated by the OBR to be 0.2% of GDP, equivalent to £6bn a year in today's money. Downing Street has said the planned change will save £15bn a year by the end of the 2030s, but did not provide detail on how it reached that figure. How much would social care reform cost? Different social care reforms come with different price tags. The Health Foundation think tank has estimated that imposing a lifetime cap on an individual's care costs of around £86,000 in England, as proposed by the official report for the coalition government by Andrew Dilnot in 2011, would cost the government around £4bn a year. The think tank estimates that introducing a Scotland-style system of "free personal care" - which does not include accommodation, food and everyday living costs - would amount to around £7.5bn a year. And the cost of creating a universal and comprehensive social care system , externalin England would be around £18.5bn a year extra by 2036. The government has not set out the full details of how the "national care system" will work, but has clarified that while an individual's direct care costs would be covered, their accommodation costs in a residential or nursing home would not be. Nevertheless, if it implemented a universal and comprehensive social care system then the expected revenues from the proposed reform could fall short. Jonathan Cribb of the IFS said the pension reform "will not be the answer to funding universal social care". This could put pressure on a future government to raise revenues from other sources - either from tax rises or spending cuts elsewhere - to pay for a comprehensive social care service in England.
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