Over half of Brits expect value of State Pension to fall
The 45 to 54 age group were the least confident the state pension will maintain its value, according to a study by Just Retirement.
The state pension will rise by 10.1% from Monday, adding nearly £19 a week to the full state pension – an extra £972 a year – and meaning the full state pension is now worth £10,600 a year.
Just Retirement surveyed 2,000 adults and found that 55% are not confident the state pension’s value will be maintained by the time they start to claim, compared to 32% who were confident it would keep up with inflation.
The findings come amid concerns about the affordability of the triple lock guarantee which is the government promise to increase state pension by the higher of inflation, average wage growth or 2.5%.
Women less confident than men about pension buying power
Stephen Lowe, group communications director at Just Group, said: “The Government’s announcement not to bring forward a rise in state pension age has once again focused attention on the long-term viability of the triple lock and the cost of the state pension to the public purse.
“Our research shows most people are sceptical that when they get to retirement the state pension will hold the same buying power it does today.”
The age groups closest (ages 55 to 64) and furthest (ages 18 to 24) from retirement were the most confident the value would be maintained, but were still outweighed by those who were not confident.
Women were significantly more likely to be pessimistic about the state pension’s value with just one in five (22%) thinking it would hold its value compared to four in 10 men (41%).
Lowe said: “Under current law, the Government is only obliged to increase the state pension by the rise in average earnings which would mean its value might erode during periods of high inflation. The 2023-24 rise, for example, would have been 5.5% had the rise in earnings been applied but by sticking to the ‘triple lock’ it has actually been increased by the 10.1% rate of inflation.
“The Government has only guaranteed the ‘triple lock’ until the next General Election and may not be able to resist tinkering, as was the case in 2022-23 when the triple lock was suspended post-pandemic. The ‘triple lock’ has successfully lifted many low-income pensioners out of poverty but there are some that view its days as numbered due to the cost.”