(Image: Peter Byrne)
The Government's plan to change the State Pension triple lock could eventually save £50billion a year, according to new analysis from the Department for Work and Pensions.
The figures reveal the potential long-term financial impact of the planned shake-up, which will see the current triple lock replaced with an adjusted system from April 2030.
But despite the huge potential savings, DWP modelling also suggests a surprising figure - showing that pensioner relative poverty could fall from around 14% today to around 8% by 2050 under the new system.
The Government stresses that these figures are long-term projections based on a series of assumptions, rather than predictions of exactly what will happen.
Triple lock change could save £50bn a year
The triple lock currently guarantees that the basic State Pension and full new State Pension rise each year by whichever is highest of:
- Average earnings growth
- CPI inflation
- 2.5%
The Government has committed to keeping the existing system throughout the current Parliament.
But from April 2030, the rules will change.
Under the adjusted triple lock, the State Pension will continue to rise by at least inflation or 2.5%, whichever is higher.
It will also rise by more if necessary to maintain its value relative to average earnings.
The Government says this means the State Pension will continue to rise over time in line with average earnings, while retaining its high value relative to wages.
DWP predicts billions in savings
The new DWP analysis compares projected State Pension spending under the adjusted system with what spending would have been under the existing triple lock.
It estimates that the change could deliver:
- £15billion a year in savings by 2039-40 in cash terms
- £50billion a year by 2049-50 in cash terms
- Around £11billion in real terms by 2039-40
- Around £30billion in real terms by 2049-50, using 2025-26 prices
These are described by the DWP as indicative long-term savings to Annually Managed Expenditure.
The Government says the savings from adjusting the triple lock will be used to help fund its planned National Care Service.
'Ending' the State Pension triple lock: what is really likely to happen? Many are confused, and think the State Pension won't rise. Actually the change is subtle, it's about loosening, not ending, one of the three locks - the link to average earnings. So I want to try to explain…
— Martin Lewis (@MartinSLewis) September 30, 2026
Pensioner poverty could still fall
One of the most striking parts of the analysis is the DWP's modelling of pensioner poverty.
It projects that relative pensioner low income after housing costs could fall from around 14% in 2024-25 to around 8% in 2049-50 under the adjusted triple lock.
The measure defines relative low income as household income below 60% of the contemporary median.
However, the DWP is clear that this is a projection based on assumptions about future earnings, inflation, demographics, pension participation, benefit receipt and other factors.
It says outcomes become increasingly uncertain further into the future.
From 2030, the Government is proposing changes to the Pensions Triple Lock to ensure pensioners continue to be protected and the State Pension remains sustainable for future generations. pic.twitter.com/SrzlG2kfKT
— Department for Work and Pensions (@DWPgovuk) September 29, 2026
What will happen to the State Pension?
For the next few years, pensioners will continue to receive the existing triple lock.
The Government says the current system will remain in place until April 2030.
After that, pensioners will still have protection against inflation and will still receive at least a 2.5% annual increase.
But the direct link to earnings growth will change.
If wages rise faster than inflation and 2.5%, the State Pension could receive an additional increase where necessary to maintain its value relative to average earnings.
The Government has said this means pensioners will continue to share in rising prosperity, while the system becomes more sustainable over the longer term.
Government says pensioners will not lose money
The Government has stressed that the adjusted system will not mean State Pension payments falling.
Its plans state that “Nobody’s pension will ever go down”, while the State Pension will continue to rise each year.
The Government has also linked the reform directly to its plans for a National Care Service, which it says will provide free personal care for older people based on need rather than ability to pay.
The proposed service is due to be introduced in phases, with the final design still to be developed.
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The figures come with a major warning
The DWP describes its analysis as illustrative, rather than a forecast of future policy or future poverty rates.
Its modelling uses the Pensim3 dynamic microsimulation model, drawing on administrative and survey data and projecting outcomes through to 2100.
It also uses the ONS's 2024-based population projections.
The department warns that long-term estimates are inherently uncertain because they depend on factors including future earnings growth, inflation, mortality, migration and the number of people entitled to the State Pension.
It also says the analysis isolates the impact of the uprating policy and does not model behavioural responses or wider changes to the economy and Government policy.
That means the £50billion figure should not be treated as a guaranteed annual saving in 2050.
Instead, it is the DWP's estimate of the difference between projected spending under the adjusted system and projected spending if the current triple lock continued, under the assumptions used in its model.