Is now the time to look at your pension

There is certainly good news about state pensions for most people who are set to receive them. Millions of state pensioners are looking forward to the biggest pension pay rise on record this spring, with the new state pension going up to £203.85 in the new tax year.

The increase is thanks to the triple lock, the policy which preserves the value of the state pension every April in line with the highest of the previous September’s inflation, annual wage growth or 2.5%, whichever is the largest. High inflation means that the new state pension will rise to £10,600.20 a year from April. That is a £972 rise compared with the current financial year. 

The basic state pension, paid to those who reached state pension age before 2016, will increase to £156.20 a week or £8,122.40 annually.

But there could be some less welcome news ahead. The triple lock could be under threat, and the date when you can start claiming your state pension could be going back.

The triple lock could be cracked

The state pension will cost the Government an additional £11bn next year, according to estimates from the Institute for Fiscal Studies. This comes at a time when the treasury is already struggling with debt in the wake of the pandemic, and when the recovery of the economy remains wobbly, to say the least.

The policy, which was a key Conservative manifesto pledge, remains part of the government’s policy for the time being. But despite its obvious appeal to millions of older voters, it looks increasingly difficult to justify, or afford. We are living longer and there are more of us claiming state pension. The burden on  younger workers who pay the tax that funds the pension is becoming steadily more onerous.

The triple lock is popular with older voters, but it did not stop then Chancellor Rishi Sunak from unlocking it in September 2021.The state pension rose only by 3.1% in April 2022, based on September 2021’s inflation figure. The triple lock would have raised the state -pension by 8.1%.

Some critics of the triple lock have suggested that a “smoothing” process would improve its affordability, so that the state pension increases by the average of inflation, wage growth and 2.5%, rather than the highest of the three. Others hint at more radical reforms. Means testing has been discussed.

One of the more likely changes suggested is to delay state pension age.

Putting back the age of retirement

State pension age has already gone to 66 after years of being 65, and will rise to 67 from 2026, just three years away.

It was intended to climb again to 68 from 2044, but it could be brought forward to as early as 2033 and affect those aged 54 and under today. Millions of people born in the 1970s and later will have to work for longer.

Working into later life could be all well and good if you are healthy and if you enjoy your work.

If you can’t wait to down tools, raising the state  pension age is rather less appealing. 

There could be an easy solution

Whether you are a pension saver or have already retired, you are probably all too aware that the state pension needs to be topped up by company and personal pensions.

Having an employer’s pension scheme is one way of having a pension you can look forward to – but arranging a private pension  puts you in control. With the tax relief available it is an excellent way to invest, grow your wealth, and look forward to a comfortable old age, whatever happens to the triple lock or state pension age.

To find out more about a personal private pension, contact us at Continuum today.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable retirement strategy, you should seek independent financial advice before embarking on any course of action.

A pension is a long term investment, the fund value can go down as well as up and this can impact the level of pension benefits available.

The tax treatment of pensions in general and tax implications of pension withdrawals will be based on individual circumstances, tax legislation and regulation, which are subject to change in the future.

Abandoning state pension triple lock would cost retirees £12,000 (

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