Chancellor Rishi Sunak is again reportedly considering modifying the triple lock to address concerns that a rise in earnings figures could drive a sharp increase in the state pension.

The Telegraph has reported that Treasury officials are examining the merits of temporarily replacing the current system with a ‘double lock’ for a year, which would see an annual increase in the benefit matching the higher metric out of inflation or 2.5%.

Critically, this would remove average year-on-year earnings growth from the equation, which is set to rise sharply due the number of people returning to work after losing their jobs or being furloughed in the pandemic.

Illustrating this, Office for National Statistics (ONS) figures released in July showed that average earnings had increased by 8.6% in May 2021 compared to 12 months prior.

Conversely, inflation measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 2.4% in the 12 months to June 2021.

The Telegraph claimed Sunak is working to establish whether there is sufficient support for the change to a ‘double lock’ system among Conservative MPs before making a decision next month.

Corners of the pensions industry have long been voicing concerns about how the use of the triple lock amid economic recovery from the pandemic could lead the state pension to rise sharply.

Meanwhile, a petition on the official Parliament website calling on the government to move the state pension age back to 60 for both men and women has attracted more than 60,000 signatories.

It stated: “Young people are struggling to find work, and losing their jobs, due to the pandemic. Why not allow older people to retire earlier, thereby freeing up jobs for younger people? There would be a cost, however, surely a far more positive cost than paying Universal Credit? Not to mention the option of restoring the balance back into young people's favour and helping restore their future.”

Responding to the petition last week, The Department for Work and Pensions (DWP) said reducing the state pension age to 60 would be “neither affordable nor fair to taxpayers and future generations”.

It continued: “The latest ONS data shows that the number of people over state pension age compared to the number of people of working age is expected to increase. On average, people are living longer, and increasing the state pension age in line with life expectancy changes has been the approach of successive governments over many years.

“It helps to maintain the cost and sustainability of the state pension in the long term. The state pension is funded through the tax contributions of the current working-age population. Reducing the state pension age to 60 would therefore increase the tax burden of the current working-age population.”

The DWP added that government estimates from a scenario where it had not put in place any increases in state pension age for men or women put the cost to taxpayers at around £215bn for the 15-year period starting at 2010/2011.

The petition will be considered for debate in the Houses of Parliament if it reaches 100,000 signatures before 20 October 2021.

(This article first appeared on our sister title www.pensionsage.com.)

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