Recent reports suggest that while state pension increases might outpace inflation by next April, the Triple Lock ending could affect retirement income for many.
In September, the UK’s Office for National Statistics published the most up-to-date figures on earnings for the months May to July of this year. The data is used to set how much the old state pension and the new government pension from April 2024 will increase by.
Both of these state pensions, however, are affected by the “Triple Lock”, which is designed to ensure that pensions stay in step with CP inflation, earning growth of 2.5 per cent. Despite having a significant impact on government pensions, the Triple Lock is not included in UK pensions legislation. Instead, the Triple Lock feature is discretionary, and the government can choose to ignore it.
Ministers have voiced concerns that maintaining the Triple Lock feature is unsustainable in the long-term, but experts agree that it’s unlikely to be suspended soon, with an election anticipated next year. However, prime minister Rishi Sunak has confirmed that it isn’t featured in the new Conservative Party manifesto.
The Institute for Fiscal Studies (IFS) recently reported that the Triple Lock is an issue that creates uncertainty for people planning their retirement.
If you have concerns about income in retirement, and are in need of retirement planning specialists in Chester, we can help. Reach out to Hartey Wealth Management for a full appraisal of your financial situation and assistance planning for your upcoming retirement.
