State pension report from IFS: summary review

The Institute for Fiscal Studies (IFS) published the first report in its 18-month review of the UK pension system, aiming to influence the government pensions policies. 

Key points of the IFS report:

• The proposed cap on state pension spending (6% of GDP) is inflexible and unfair to larger birth cohorts.
• Raising the State Pension Age would harm lower‑income workers, who have shorter life expectancy and heavier reliance on the state pension.
• The state pension should never be means‑tested, a position UNISON supports.
• Replace the triple lock with an earnings‑only uprating system, using the consumer price index only when temporarily higher.

UNISON, however, argues this would have produced significantly lower pension increases since 2012 (45% vs 57% under the triple lock).

And it warns that the IFS proposal would weaken the state pension over time, especially given the inadequacy of workplace pensions, with most workers now in low‑contribution defined contribution schemes.

UNISON welcomes the IFS’s stance on rejecting the spending cap and highlighting the unfairness of pension age rises. It believes it will be necessary to revisit the role of the state pension, and the government more widely, in addressing a serious shortfall in the pension entitlements workers are currently building up.