Worrying new research has revealed growing fears for the future of the state pension.
Almost one in five (18%) people don’t believe the state pension will exist when they retire, according to Hargreaves Lansdown, while a further 26% are unsure. But well over half (57%) think it will exist.
The younger you are, the less likely you are to believe the state pension will still be around when you retire. Only 38% of 18 to 34-year-olds believe the state pension will still exist at that point.
Survey of 2,000 people was carried out by Opinium on behalf of Hargreaves Lansdown in September 2023. It now looks like the state pension will increase by 8.5% in April 2024, in line with average wage growth. This means state pensioners could see their weekly payments rise by as much as £17.35 a week.
It follows a bumper 10.1% increase this year. How much state pension you get all depends on when you reached retirement age and if you get the full amount, based on your National Insurance record.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown: “The state pension is the backbone of our retirement income, and yet the constant merry go round of change means almost one in five of us don’t think it will exist in the coming years. We are all living longer, and this has pushed up costs.”
She added: “There are levers the Government can pull to try and contain the cost. One is to tinker with the triple lock, so increases are not so high. We saw this during the pandemic when furlough inflated wage data, prompting the government to opt for the lower inflation figure instead.
“We may well see this happen again, given the contribution one off bonuses to the NHS and civil service have made to high wage data. If this is the case, it gives further evidence to the case to either change or scrap the triple lock.
“The other option is to increase state pensions age. Again, we have seen this happen already and there was a recent review on accelerating the shift to 68. The Government opted against this in the end, but it will be revisited in future. The challenge is that if we raise the age too far not only will we see people forced to work longer than they are able to, but many people simply won’t live long enough to claim it.”