Rachel Reeves has been urged to axe the state pension triple lock and replace it with a link to earnings. The Institute for Fiscal Studies (IFS) said the Government is spending an extra £12billion per year as a result of the current policy.

Heidi Karjalainen, author of an IFS research note, said spending on the state pension is expected to rise by about £80bn in today’s terms by the 2070s. She added: “Maintaining the triple lock over the long term will have to mean either higher taxes and/or lower spending elsewhere.

“And this spending pressure would, if left unchecked, come on top of increasing pressure for more spending on health and social care.”

Ms Karjalainen said the perks of a higher state pension would benefit richer pensioners more because they tend to live longer than those who are less well off.

Instead of the triple lock, the IFS suggested that the Government set a target for the state pension to match a percentage of average earnings.

Under the existing policy, the annual increase in the state pension is the highest of CPI inflation, average earnings growth or 2.5%.

Pensioners are on course for a 4.8% rise in the state pension next year after Office for National Statistics (ONS) figures were released on Wednesday.

Total wage growth, including bonuses, for the quarter to July was 4.8%. This is therefore the key figure expected to be used for next year’s state pension increase.

The rate of Consumer Prices Index (CPI) inflation was 3.8% in September, remaining at the same level as both July and August. Wage growth of 4.8% means pensioners who receive the full state pension are on course for £12,548 from April.

Further questions about the sustainability of the triple lock have been raised by ONS figures showing more people are living longer.

The outcome of a review of the state pension and benefits will be announced next month. The Secretary of State for Work and Pensions is required by law to undertake a review each year.

Chancellor Rachel Reeves vowed to protect the triple lock before Labour swept to power in July 2024.

She said in April last year that people who work hard should be able to live a good life in retirement, but confidence among the public of the triple lock continuing appears to have dwindled.

A report for Standard Life, which involved a survey of 6,000 people by Ipsos in June, found less than a third (29%) of people believe the triple lock will still be in place when they reach retirement.