Fears state pension could be scrapped entirely over triple lock pressures | Personal Finance | Finance
Many Britons are concerned there will be no state pension for them when they retire with almost one in five people fearing the policy could be scrapped.
The costs of the state pension are set to increase substantially next year with pensioners on course for an 8.5 percent increase – after a 10.1 percent payment hike earlier this year.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “It’s no wonder that all this change means there’s a view, particularly among younger people, that the state pension is under threat.
“Given its importance as the foundation upon which we build the rest of our pension planning, we need to see real long-term thinking in this area with an overarching review to ensure it remains sustainable long-term and allows people to plan their retirement with confidence.”
She said the Government may be forced to tinker with the triple lock policy again this year to reduce the payment hike, after ministers went for the inflation element two years ago after average earnings shot up coming out if the OCIVD-19 pandemic.
The analyst said: “We may well see this happen again, given the contribution one off bonuses to the NHS and civil service have made to high wage data. If this is the case, it gives further evidence to the case to either change or scrap the triple lock.”
The other option for the Government to ease the burden of the state pension is to increase the state pension age. This is already set to go up from 66 to 67 and then to 68 over the coming year.
A report was published this year looking at the possibility of bringing forward the timetable for shifting from 67 to 68.
Ms Morrissey said: “Again, we have seen this happen already and there was a recent review on accelerating the shift to 68. The government opted against this in the end, but it will be revisited in future.
“The challenge is that if we raise the age too far not only will we see people forced to work longer than they are able to, but many people simply won’t live long enough to claim it.”
Opinium surveyed 2,000 Britons on behalf of Hargreaves Lansdown to find out their views on the future of the state pension.
Almost one in five respondents said they don’t think there will be a state pension when they retire although over half said they think it will still exist.
Younger people are less confident they will get a state pension with just 38 percent of 18 to 34 year olds convinced they will get the payments.
The vast majority of over 55s believed they will get a state pension while just 42 percent of those aged 35 to 54 think they will get theirs.
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