State Pensions Increase Confirmed Tomorrow – But Britons Fear ‘Permanent Changes’ | Personal Finances | Finance
The triple state pension lockdown will not be implemented in the usual way next year, a move that has sparked outrage among retirees and now leaves them wondering if permanent changes could be on the horizon . The value of the state pension for fiscal year 2021/22 will be confirmed tomorrow, as the rate of inflation – which is an element of the triple lockdown – will be announced.
Retirees are expected to receive a large increase in state retirement income, which has not been the case for the past 10 years, but that may not be enough to appease retirees who feel they are not receiving what they deserve.
A survey by independent price comparison website NerdWallet found that more than a third of those surveyed (35%) said the suspension of the state pension triple foreclosure worried them about the impact that this would have on their future retirement income.
The triple foreclosure of the state pension is a government policy that has been in place since 2010 and ensures that the value of the state pension increases every year. Its objective is to help retirees maintain their purchasing power in the face of the rising cost of living.
Under the triple lock, the value of the state pension must increase each year by the higher of the three digits. These are the average earnings growth, the inflation rate, and 2.5%.
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The Bank of England estimates that inflation could exceed four percent for the year through September 2021, a figure that will ultimately decide the value of the state pension next year, assuming it effectively exceeds 2.5 percent.
Inflation rose from 2% for the 12 months up to July 2021 to 3.2% for the year up to August, which was a record high in terms of a month-long inflation increase to the other.
And it looks like inflation will continue to rise when the official figure is released tomorrow, as retirees finally find out how much state pension they will receive for fiscal year 2021/22.
However, that may not be a big consolation for many, with a four percent increase still only being half of what they might have had had the triple lockdown been honored as usual.
The government has broken the commitment made in the 2019 manifesto by failing to meet the triple lock for next year, which also appears to have shattered the confidence of those over 65, who will not receive as much state pension they hoped.
The recent move to end the triple lockdown on public pensions appears to have eroded public confidence in the government’s pension policy, especially among those over 65.
Some 36% of those polled said the government’s decision to suspend the triple lockdown made them less confident in the government’s retirement policy, a figure that rises to 52% among those aged 65 and over.
In July, the Office for Budget Responsibility suggested that an eight percent increase in the triple foreclosure would add around £ 3 billion a year beyond what had been planned for government spending on the pension of the ‘State.
But despite the economic arguments for the move, support for suspending the triple lock is low, with just a quarter (25%) of respondents agreeing. Support was highest among the youngest age group 18-24 (40%) and lowest among those aged 45-54 (19%).
Richard Eagling, Senior Pensions Expert at NerdWallet, said: “The triple lock is an expensive commitment for any government, but it has enjoyed strong public support since its introduction in 2011.
“Fear of retaliation from voters has left the government reluctant to change the triple lockdown in an attempt to get such responsibilities under control, and these concerns are not unfounded. The suspension of the triple lockdown has undermined confidence in the government’s retirement policy and left many wondering if more permanent changes could be considered.
“A significant number of people come to the conclusion that they are not overly reliant on what the state pension might offer and are now looking to build up their own pension provision to increase their chances of having a decent income at home. retirement.”