Pensions - Articles - State pension certainty needed as 1 in 4 unsure about future

 Helen Morrissey, head of retirement analysis, Hargreaves Lansdown: “The state pension forms the very backbone of our retirement income – there are very few people who are not reliant on it to some extent. However, a combination of an ageing population and shrinking workforce has put it under pressure, leading to concerns as to how it can remain sustainable long-term. There is ongoing debate as to whether the triple lock should remain as the measure used to uprate the state pension or whether it is too expensive. Other rumours centre on whether state pension age will need to rise further or if state pension should actually be means-tested.

 Such rumours can be concerning, but our research shows that only one in ten people don’t believe the state pension will exist by the time they get to retire. A further 21% said not only did they believe the state pension would still exist, but that the triple lock would still be used to uprate it on an annual basis. A further quarter (24%) said they thought the state pension would still be a feature, although they didn’t expect the triple lock would survive. One in five thought there may have to be some kind of means-testing put in place.

 However, there is also a lot of uncertainty out there. Over a quarter of people said they didn’t know if the state pension would still be around by the time that they retire. It’s certainty that people need if they are to plan for the long-term. The state pension and the triple lock’s role within it needs to be at the heart of the government’s ongoing pension review to make sure it is put on a sustainable footing so people can plan for their future without fear of major change.

 Knowing what you can expect to get from the state pension, and at what age, gives you a firm foundation on which to plan the rest of your retirement. It will give you a better idea of how much you need to save into pensions such as SIPPs, so you get the retirement that you have planned for.”