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Torsten Bell, Britain’s new pensions minister, has previously called for the replacement of the “triple lock”, which protects the value of payments to pensioners, describing it as “not a sensible mechanism”.
Bell was appointed to the government role on Tuesday after Tulip Siddiq resigned as City minister and former pensions minister Emma Reynolds was promoted.
Elected MP for Swansea West in the 2024 general election, Bell previously served as a special adviser to then chancellor Alistair Darling and head of policy under Ed Miliband when he was Labour leader, before heading the Resolution Foundation think-tank.
The Labour government has repeatedly vowed to protect the “triple lock”, introduced in 2010, under which pensions must rise by whichever measure is highest out of average earnings growth, inflation or 2.5 per cent.
Politicians have been loath to undermine that pledge because of the voting power of pensioners, who are more likely to cast a ballot than any other group in society.
But in a Resolution Foundation paper in 2020, Bell said “the triple lock is not a sensible mechanism for pensions uprating”.
He argued that it would be better to replace the lock with a “smoothed earnings link” that would maintain the peg to earnings over the medium term — albeit with short-term deviations to protect a pension’s value during periods of weak wage growth or high inflation.
In late 2023, the think-tank made the same point in greater depth in a report arguing that benefits for working-age people had not kept pace with inflation for years.
“Ultimately the state pension and working-age benefits should be uprated under one consistent policy,” the report said.
“Switching pensions to the same smoothed earnings link proposed for working-age benefits would gradually save 0.5 per cent of GDP compared to current plans by the 2040s, offsetting over half of the higher cost that comes from pegging working-age benefits to wages,” it added.
Bell had made the same case in 2022 on Twitter, now X, writing: “There is no possible justification — moral or economic — for treating pensions and working age benefits differently.”
However, pension experts said it was unlikely that there would be any immediate change to the triple lock, which was a Labour manifesto commitment.
Steve Webb, former Liberal Democrat pensions minister and now a partner at consultancy LCP, said there was a “huge leap between what you say in opposition and what a government can do and might prioritise”.
If Bell “oversees the review and the triple lock is in it and he is not well disposed to it, that might increase the chance it will be rethought but nothing soon”, Webb added.
Bell’s report on pensions while at the Resolution Foundation also contained various recommendations that could be controversial with savers.
It suggested that the cap on tax-free lump sum withdrawals from pensions, which is now £268,275, should gradually be reduced, based on a saver’s date of birth.
The motive for the change would be to encourage older people to stay in the workplace for longer, the report said, noting that the ability to withdraw a lump sum “can encourage early retirement”.
Elsewhere, Bell has suggested cutting the cap on the tax-free lump sum to as little as £40,000.
The think-tank’s report put forward proposals to nudge older workers into retiring later, including raising the age at which private pensions can be enjoyed with full tax perks.
It also said pension pots should be included within an estate for inheritance tax purposes — a measure that the government introduced in its Budget last year, with proposals now under consultation.
Bell has also previously said there is a “well-trodden case for completely reforming pensions taxation”, including by moving to flatter rates of pension tax relief.
Chancellor Rachel Reeves has previously supported a flat rate of tax relief but the government has so far avoided introducing such a policy owing to the impact it would have on higher-earning public sector workers.
“While Bell has previously advocated for radical pension tax reforms — such as moving to flat-rate pension tax relief and capping the tax-free lump sum at £40,000 — these ideas often fail to account for the practical realities facing savers who have relied on the stability of the existing system,” said Jon Greer, head of retirement policy at wealth manager Quilter.
The government said its “commitment to the triple lock is unwavering because we want pensioners to enjoy the dignity and respect they deserve in retirement”.
Questions have also arisen about Reynolds’ responsibilities as City minister given her previous career as a lobbyist. Before joining parliament last summer she was managing director of The CityUK, which lobbied the Conservative government against imposing strict new reporting requirements on those doing business with China.
The current Labour government is still considering the details around the delayed plan, known as the foreign influence registration scheme.
Downing Street declined to provide clarity about Reynolds’ brief on Wednesday.
