Instead of asking ministers to search for budget reductions, Liz Truss has reneged on a crucial election promise to raise state pensions in line with soaring inflation.
Payments increase by whatever is higher: prices, the average wage, or 2.5%, as the prime minister declared two weeks earlier that she was "committed" to the triple lock.
She is currently "not making any pledges" regarding government spending, according to her spokesman.
It follows the mini-main budget's tax reduction being abandoned.
Investors have been reassured by Chancellor Jeremy Hunt's decision to scrap the majority of last month's mini-budget pronouncements, but Ms. Truss is now fighting to retain her authority.
Normally, a decision on how to handle pensions beginning in April would have been taken this fall.
The PM's spokesperson insisted that she was still committed to her goal of increasing defense spending to 3% of GDP by 2030.
With the exception of a one-year delay because of Covid, the triple lock has been in place since it was implemented under the Conservative/Liberal Democrat government.
In 2021, the government took action to suspend the promise when the pandemic caused an exceptionally significant increase in the average earnings number.
In their manifestos for the 2019 general election, the Conservatives and Labour both pledged to keep the triple lock.
According to the PM's spokesman, she is aware of "how many vulnerable retirees there are" and has made protecting them a "priority."
The spokesman stated that abandoning the former triple lock commitment was a "joint decision" between the PM and the chancellor and that economic stability was their "shared position."
While average earnings are 5.4%, inflation is currently around 10%. According to the think tank Resolution Foundation, the government would save £6 billion by increasing pensions based on wages rather than inflation in 2019.
With the topic taking center stage at the most recent Tory party conference in Birmingham, Ms. Truss is also under pressure from some of her MPs to increase working-age benefits in line with inflation.
Jonathan Ashworth, the shadow secretary for labor and pensions in Labour, claimed the government was "considering more cutbacks to retirees' earnings" due to its "disastrous budget."
He continued, "Pensioners deserve so much better than Liz Truss and her awful errors for which older people are paying the price.
If the triple lock is not maintained, it would be a "kick in the teeth for millions of people," according to Liberal Democrat spokesman for Work and Pensions Wendy Chamberlain.
The government's remarks on pensions follow instructions to ministers to plan spending reductions before Mr. Hunt makes another economic statement at the end of this month.
As the government works to restore economic stability, Mr. Hunt told MPs on Monday that "decisions of eye-watering difficulty" on tax and expenditure would have to be made.
The chancellor informed them that he was "not making any guarantees on any individual policy areas" after being appointed after Ms. Truss's earlier commitment about pensions.
The chancellor, according to No. 10, had ordered them to "concentrate" on things that wouldn't have an impact on how the public is served.
To identify savings for the taxpayer, all departments—including the Ministry of Defense—have been asked.
Defense Secretary Ben Wallace's allies claim that he sees maintaining the 2030 defence budget objective as crossing a red line. Mr. Wallace would "hold the PM to the assurances made," a source told the BBC.