The triple lock for state pensions has led to an extra £11bn being spent a year, research by the Institute for Fiscal Studies (IFS) has found.
The analysis, part of the IFS’s Pensions Review, said government financial support to pensioners was greater because of the policy.
It said the payments would be 11% lower if it had not been adhered to.
The IFS however said the triple lock cost could reach anywhere between an additional £5bn and £45bn a year by 2050.
This is because of the uncertainty created by the terms of the triple lock which makes it difficult for the government to plan for the future.
And this might put pressure on the government to look for savings elsewhere or from increases in the state pension age on future generations.
The pension triple lock is an ironclad commitment by the coalition government, introduced in 2010, which guarantees the state pension rises each April by whichever is highest of pay growth, inflation or 2.5%.
It was designed to ensure peoples’ pensions were not impacted by gradual rises in the cost of living over time.
Prime minister Rishi Sunak is expected to support the increase after pledging last month to maintain the triple lock.
Labour have also pledge to keep the triple lock after the next general election.
The IFS said if the triple lock is kept in place indefinitely, the state pension could potentially be worth between £10,900 to £13,400 per year in today’s terms by 2050.
Becky O’Connor, director of public affairs at PensionBee, said: “The state pension forms a large proportion of most people’s retirement income – some people have nothing else at all in old age.
“It’s vital that older people are kept out of poverty and that their incomes rise by enough to continue to meet basic living costs.
“While there is a case to review the triple lock and make sure it is working as it should, its purpose – to ensure older people are at least able to eat and heat their homes, must be honoured.”
