• Around a fifth (18%) of adults say they could live on the state pension alone in retirement
• However, a third (35%) of the pre-state pension age group (60-65yrs) have zero private pension saving
• 45% of adults expect to work beyond their state pension age to plug gaps in savings
• 3 million people would see a delay in state pension payments if the state pension age increase to 68 is brought forward to 2041-2043 (as recommended by the Baroness Neville Rolfe report)
Patrick Thomson, Head of Research Analysis and Policy at Phoenix Insights, comments: “April’s 4.1% state pension uprating will provide some relief to pensioners while cost pressures remain high. Since 2012, the triple lock has increased the state pension each year by the highest of inflation, wage growth or a 2.5% minimum, and April’s 4.1% uplift is the fourth highest since it was first applied.
“However, the state pension remains at a critical juncture with questions remaining over its long-term affordability and the future of the triple lock. Projections suggests there will be five million more state pensioners in the UK by 2070 compared to just one million more people of working-age.
“Accelerating the state pension age could mitigate some of the cost challenge, but recent life expectancy projections are less optimistic making policy change potentially more difficult. Bringing forward the state pension age increase to age 68 to the early 2040s would impact nearly 3 million people and not everyone will be able to work to a later state pension age. We are expecting another state pension age review in this parliament which should offer more clarity on the timetable of the future increase to age 68.
“Even with the impact of the triple lock, the state pension in the UK is lower than the OECD average, and the UK spends a lower proportion of government spending on state support for pensioners compared to peers in the OECD. It’s important that any future change to the state pension is combined with policy interventions to support greater retirement adequacy, including enabling people to remain in work later in life and boosting pension saving through auto-enrolment.”
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