A new Office for Budget Responsibility (OBR) report has revealed the state pension costs treble
The state pension triple lock is a “large financial risk” as UK the looks set to spend £10 BILLION more than expected, a damning report has warned. A new Office for Budget Responsibility (OBR) report has revealed the state pension costs treble what it was initially assumed to cost when it was introduced by the Conservatives and Liberal Democrats in 2011.
UK public finances are in a “relatively vulnerable position” with the country facing a “substantial erosion of UK’s capacity to respond to future shocks”, the OBR warns. The triple lock costs £15.5billion a year rather than the initially estimated £5billion annually.
And the Department for Work and Pensions (DWP) payments, for millions born before 1959, are on course to cost 7.5 per cent of the UK’s entire gross domestic product within 50 years.
READ MORE Exact date new bin rules in England start
In its 2025 “Financial risks and sustainability” report, the Government body stated: “In practice the triple lock has cost around three times more than initial expectations.
“This is primarily because the period since 2012 has seen more volatile inflation and lower earnings growth than the two decades prior to the triple lock’s introduction. Relative to CPI uprating, we expect that the triple lock will have added £22.9 billion to annual state pension spending by 2029-30.”
The watchdog said its annual fiscal risks and sustainability report that debt is projected to be “above 270 per cent of GDP by the early 2070s”. The forecaster added that recent rises in debts have led to “a substantial erosion of the UK’s capacity to respond to future shocks and growing pressures on the public finances”.
In report, the OBR concluded: “while changes to the state pension have played a substantial role in reducing reliance on means-tested pensioner benefits in recent years and improving retirement income adequacy in future, they have also contributed to state pension spending becoming a large and growing fiscal risk.
“Over the next 50 years, the ageing population and the continuation of the triple lock would both put significant, and roughly equal at around 1.6 per cent of GDP, upward pressure on state pension spending. And further risks stem from the uncertainty around these pressures.”