State pension age could be changed as triple lock ‘in question’ over affordability | Personal Finance | Finance

Earlier this week, the Work and Pensions Committee questioned John Cridland, an independent reviewer of the state pension age. He reiterated his findings that keeping the triple lock in place would continue to put pressure on the retirement age threshold.

The triple lock is a Government promise to raise state pension payments by either inflation, average earnings or 2.5 percent; whichever is the highest.

Last year, this pledge was temporarily scrapped due to average earnings being artificially inflated during the pandemic with pensioners missing out on a sizable payment rate boost.

However, the Government has confirmed the triple lock will be fully reinstated to help vulnerable older households during the cost of living crisis.

Despite this, experts are warning that the triple lock is now “in question” to the long-term viability of the state pension and its affordability.

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Specifically, the number of people currently living in retirement and those approaching pension are alarming many analysts.

Some of the proposals being recommended is raising the state pension age earlier than expected so people get their payments later.

Conversely, experts have argued this is not feasible as many Britons cannot continue working past the state pension age, which is currently 66, and well into their 60s.

Even with this conundrum, Mr Cridland believes that continuing with the triple lock would be unfair to younger taxpayers down the line.

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Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, addressed the retirement expert’s previous statements that the state pension needed to be reviewed in order to ensure generational fairness.

She explained: “The state pension age conundrum was well summarised by John Cridland, who said: ‘people want their pension, but they need to live long enough to receive it’.

“It’s a tricky balancing act – we are living longer but increases are slowing but as government actuary, Martin Clarke said there’s no getting away from the fact we have a large cohort of older people either receiving state pension or who soon will be.

“Accelerating state pension age may seem like the logical next step but we need to remember not everyone can continue working into their 60s for health reasons and we can’t forget there remain large parts of the population who will not live long enough to draw a state pension for any considerable length of time.

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“This brings the existence of the much-debated triple lock into question – in Cridland’s review of state pension age in 2017, he said there would come a point where the triple lock had done its job in raising state pension but that its continued existence would become unfair on younger taxpayers and force further increases in state pension age– has this tipping point been reached?”

The pensions expert highlighted issues regarding the state pension triple lock are one of many regarding peoples’ retirement plans.

Ms Morrisey added: “It’s also important to say state pension and the age at which it is set is not the whole issue. It’s all part of a much larger conversation, not just of state pension, but of how we help older workers to remain engaged in the workforce.

“People often can’t do the same jobs in their 70s as they did in their 50s but that doesn’t mean there shouldn’t be a role for them. Similarly, people shouldn’t be forced out of the workforce because they have caring responsibilities.”

State pension payments are set to receive their triple lock rise in less than two months’ time on April 6, 2023.

Using the Consumer Price Index (CPI) rate of inflation for September 2022, the rate hike will be 10.1 percent.

The full flat-rate state pension will go up from £185.15 per week to £203.85 per week, which will be £10,600.20 per year.

In comparison, the basic state pension will increase from £141.85 per week to £156.20 per week.

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