Fears of a triple lock on state pensions, as future pensioners might lose out on £17,000.
If the policy is upheld, RISHI SUNAK and the Conservative Government would have to determine whether to repeal the state pension triple lock, which will result in a predicted pension increase of 8.8%. Aside from the apparent impact on existing retirees if the mechanism is removed, there are now suggestions that future retirees may bear the brunt of the changes in the years ahead.
The state pension triple lock has been the subject of much debate and concern in recent months, as pressure mounts on Rishi Sunak and the Conservative Government to decide whether or not to honor the policy. Any choice is certain to stir controversy, but according to a financial expert, any alteration to the triple lock could have the greatest impact on younger people.
The benefits of the triple lock in its current form, according to Zoe Stabler, Investment Writer at Finder.com.
“At the moment, the pensions triple lock ensures that the amount of state pensioners get is updated in step with inflation,” she stated.
“This is essentially to ensure that the money received has the same purchasing power.”
“Under the existing system, the state pension is increased by at least 2.5 percent each year,” Ms Stabler explained.
“Even if the price of products and services or average incomes never changed, that would be the case.
“The triple lock’s fundamental benefit is that it ensures that the state pension maintains stable — or better — spending power,” she continued.
If the government decides to eliminate the triple lock, Ms Stabler believes that younger people will be particularly hard hurt.
“If the triple lock is repealed, it will primarily affect the younger generation,” she remarked. “Anyone nearing retirement has benefited from a little boost from triple lock and would be at a slight disadvantage if they left now.
“We’re talking about two to three percent every year, but younger age groups simply won’t have the same amount of money in real terms if it isn’t raised on a regular basis to keep pace with or exceed inflation.”
“A current 25-year-old retiring in 2064 may receive a state pension of £27,000 if triple lock is maintained and inflation or yearly wages never exceed 2.5 percent,” Ms Stabler added. If the triple lock is removed, the figure may stay the same at £9,339.”
“That is much below what is required to retire comfortably,” she concluded. Brinkwire Summary News