Pension: Expert advises people to ‘start sooner’
Make the most of your money by signing up to our newsletter for FREE now
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
State pension payments rise every year under the triple lock but for 2022, payments have been predicted to rise by as much as eight percent. This is the result of temporary earnings spikes due to the impact of coronavirus and should the Government commit to the boost, it will cost UK taxpayers billions.
New research on this topic was released today which highlighted that a large portion of the UK population may not be happy with the potential rise in costs.
Canada Life conducted a survey of 2,000 UK adults between July 16 and 19.
The results of this survey showed only 46 percent of UK adults believed the state pension triple lock should stay as it is in light of the potential eight percent increase.
Over 50’s are much more likely to want to keep the triple lock promise with almost six in 10 (59 percent) supportive of maintaining it compared to around a third (34 percent) of those under 50.
Many want the triple lock gone (Image: GETTY)
The same research showed women are perhaps more likely to see both sides of the argument, with more than a quarter (27 percent) saying they don’t know, compared to less than one in ten (nine percent) men.
Despite the aversion to maintaining the triple lock, only 16 percent of respondents supported a move to a less generous “double lock”, which would lead to an increase in line with inflation or 2.5 percent.
Even fewer people (14 percent) supported the idea of finding a compromise to use a lower earnings figure with the furlough impact stripped out.
Indifference also appears to be prevalent among Britons, as almost a quarter (23 percent) of respondents said they were unsure or uninterested in the decision.
State pension UK: DWP confirms claiming rule changes for expats [INSIGHT]
Rishi Sunak: Five key pension rules that Chancellor could change [EXPERT]
Pension relief at source: HMRC warns returns remain outstanding [WARNING]
Andrew Tully, a technical director at Canada Life, commented: “Maintaining the triple lock has long been a manifesto promise.
“However, no-one could have predicted the 18 months we’ve just experienced with the effect of millions of people being placed on furlough, artificially boosting the earnings data as they return to work.
“The Government has a difficult path to navigate, to ensure the state pension remains affordable in what is a difficult time for the nation’s finances, while also bearing in mind it’s manifesto commitments.
“It’s important to remember that each one percent rise in state pension costs the taxpayer around £850million a year.
State pension payments rise every year (Image: EXPRESS)
“One option could be to strip out the artificial earnings growth from the data, making it more representative of the real underlying growth in earnings.
“The state pension would increase by a material amount, hopefully seen as fair in these exceptional circumstances, and making sure manifesto pledges are met.”
State pension payments are currently £179.60 per week for those who have at least 35 years of National Insurance contributions.
While this may be lower than what one would receive from employed incomes, Canada Life highlighted new state pension payments have increased by 15.4 percent since April 2016.
Additionally, to buy the equivalent new State Pension of £179.60 a week would cost you around £320,000 using an inflation-linked annuity at today’s rates.
With the rising costs associated with the triple lock, the Government is reportedly considering dropping its manifesto commitment to maintain it.
A temporary suspension could be rolled out to mitigate the costs.
Despite this, many Ministers in recent months have vowed to maintain the tripe lock as it stands and Kwasi Kwarteng, the Business Secretary, assured the triple lock remains “safe”.