Claims that the pensions triple lock benefits wealthier older people the most and should be overhauled have been slammed by campaigners.
They hit out after a new report by the Institute for Fiscal Studies (IFS) said a new earnings-linked guarantee should be set for the state pension.
The leading research institute warned there is currently no sense of what level the pension will reach or when.
Under current triple lock arrangements, the state pension normally increases each April in line with the rise in inflation, earnings or 2.5 per cent – whichever is higher.
Chancellor Jeremy Hunt announced he would keep it in place for another year following a relentless Daily Express campaign to protect it.
But the study, led by the IFS in partnership with the abrdn Financial Fairness Trust, suggested a new way forward, to help ensure the state pension has a sustainable long-term future.
As has happened with the National Living Wage, the Government should state what it believes to be an appropriate level for the new state pension relative to average earnings, the IFS said.
It currently stands at 30 per cent of median full-time earnings, which is its highest share since at least 1968, though it remains less generous than state pensions provided in many other advanced economies that have much more limited provision of private pensions, according to the research.
Having set a target, the Government should then legislate a pathway to meet it with a specific timetable, the report argued.
In choosing the level of the new state pension, the Government should consider the trade-off between a higher income for pensioners and the cost to the public finances.
The Pensions Review said there is currently no sense of what level the pension will reach or when – and the triple lock provides neither future pensioners nor the Government with any certainty regarding the level of the state pension.
Researchers said the state pension age should only rise as longevity at older ages increases, and never by the full amount of that longevity increase.
And they claimed the triple lock is of more benefit to those who have higher life expectancy, such as richer people.
Dennis Reed, director of the Silver Voices campaign group, fumed that the said IFS was trying to scrap the triple lock in a “sneaky” way.
He said: “It’s a very sneaky move from the IFS.
“They failed with their full frontal attack on the triple lock thanks to our campaigning.
“Now they are trying to find another way round.
“I would agree if they were saying they wanted to set a target of the state pension being half of average earnings but until then the triple lock remains.
“But they want the triple lock scrapped while setting a mythical target linking it to average earnings.”
Carl Emmerson, the deputy director at the IFS and another author of the report, said: “A new way forward is needed to ensure that people can have confidence and certainty over the state pension as a future source of income to help avoid old-age poverty and provide a solid bedrock on top of which they can build private pension saving.”
Mubin Haq, the chief executive of abrdn Financial Fairness Trust, said: “The Government made a bold decision to link the National Living Wage to earnings which have cemented support for this policy. A similar measure is now needed for the state pension to deliver the financial security and living standards we all need in retirement.”
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