Majority of pensioners distrustful of government pension policy following triple lock suspension

The recent decision to suspend the triple lock on state pensions has eroded public confidence in the government’s pension policy, particularly among the over 65s, according to a survey by NerdWallet.

Related topics:  Later Life
Rozi Jones
19th October 2021
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"Suspending the triple lock has undermined confidence in the Government’s pension policy and left many questioning whether more permanent changes could be on the cards."

In September 2021 the government announced the triple lock would be suspended for one year, meaning that the next increase in the state pension – which will come into effect from April 2022 – will now be determined by the higher of either the CPI inflation rate or 2.5%, with the potential link to average earnings temporarily removed.

36% of respondents said that the government’s decision to suspend the triple lock has made them less trustful of government pension policy, a figure that rises to 52% among those aged 65 and over.

Back in July, the Office for Budget Responsibility suggested that an 8% uprating from the triple lock as a result of the post-lockdown surge in wages would add around £3bn a year beyond what had been anticipated to the government’s spend on the state pension.

But despite the economic case for making the move, support for the suspension of the triple lock is low with just a quarter (25%) of respondents agreeing with it. Support was highest amongst the youngest 18-24 year age group (40%) and lowest among those aged 45 to 54 years old (19%).

Overall, more than a third of respondents (35%) said suspending the triple lock on state pension has left them worried about the impact it will have on their future retirement income.

On a more positive note, the suspension of the triple lock could encourage individuals to make greater personal provision for their own retirement rather than relying on the state pension. 19% of respondents said that they were likely to make greater private pension provision through their workplace pension or personal pension as a consequence, with almost half of those aged 18 to 24 years (47%) looking to take positive action.

Richard Eagling, senior pensions expert at NerdWallet, said: “The triple lock is an expensive commitment for any government to carry but it has enjoyed strong public support since it was introduced in 2011. Fear of voter reprisals has left the government wary of altering the triple lock to try to rein in such liabilities, and these concerns are not unfounded. Suspending the triple lock has undermined confidence in the Government’s pension policy and left many questioning whether more permanent changes could be on the cards. A significant number of individuals are coming to the conclusion not to overly rely on what the state pension might deliver and are now looking to step up their own pension provision to increase their chances of enjoying a decent income in retirement.”

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