OECD Urges UK to Abandon 'Triple Lock' Pension Policy Amid Fiscal Risks

The OECD has criticized the UK's 'triple lock' pension system, arguing that it imposes upward pressure on public spending and increases long-term fiscal risks. In its 140-page report, the Paris-based organization suggested that annual pension increases should be based on the average of earnings and inflation rather than the highest value, estimating this could save 2% of GDP annually. The OECD also highlighted the UK's high public debt, rising interest payments, and growing spending pressures from climate, defense, and aging demographics as limiting fiscal space. The report recommended operational improvements to boost the efficiency of hospitals, which are already high by international standards. As Rachel Reeves steps down after two years as Chancellor, the OECD's report also cautioned against raising tax rates, urging reforms to prioritize efficiency and revenue strengthening. The upcoming appointment of a new Chancellor is expected to address these fiscal challenges.