News & Views

State Pension Triple Lock

Can you achieve or maintain financial independence without relying on the State Pension?

Wells Gibson’s clients are either due to receive or currently receive the UK State Pension however the extent to which this is required certainly varies from client to client…

Rishi Sunak recently emphasised his commitment to maintaining the triple lock on state pensions. However, when pressed, he avoided confirming whether it will feature prominently in the forthcoming Conservative manifesto.

For those unfamiliar, the triple lock assures a state pension increase in accordance with either average earnings, inflation, or 2.5% —whichever of these is highest.

An ongoing debate among ministers is about potentially removing the influence of public sector bonuses from the earnings metric. This would result in an estimated pension increment of about 7.8% come April, rather than 8.5%. This move could lead to the Government saving hundreds of millions.

During a recent Prime Minister’s Questions session, SNP Westminster leader, Stephen Flynn, challenged Sunak.

Flynn, drawing attention to Sunak’s personal wealth, quipped about the Prime Minister’s possible detachment from pension concerns. Flynn then sought a direct commitment from the Conservative Party to uphold the state pension triple lock beyond the next election.

In response, the Prime Minister touted the Conservative Party’s track record, highlighting their introduction of the triple lock, the £3,000 increase in the state pension since 2010, and their efforts to reduce the number of impoverished pensioners by 200,000.

He further emphasised the party’s commitment to pensioners, pointing to additional winter fuel payments to assist during inflationary periods.

Flynn was not easily appeased, noting the lack of a definitive “yes” and highlighting historical commitments to the Scottish people.

When Flynn posed a speculative question about which party, Conservative or Labour, might abolish the triple lock first, the Prime Minister defended the Government’s position. He reiterated his commitment to the triple lock, asserting that the stability of the state pension was anchored in the strength of the UK Government and union.

The potential rises in the state pension, depending on the rate of increase, were outlined.

An 8.5% increase could push the full new state pension to approximately £221 per week, or £11,502 annually. A 7.8% increase, however, would place it around £220 weekly, or £11,427 annually. Similar scenarios were presented for the basic state pension.

Following the heated exchange, the Prime Minister’s press secretary reaffirmed the Government’s commitment to the triple lock.

Change to the UK State Pension is certain at some point however it’s never too early to start planning for that time in your life when you are no longer in paid employment.

Speak to Wells Gibson if you want to visualise what your financial future could look like; be less anxious about tomorrow; and secure all that’s important to you.