With the 4.1% increase to payments from next month, the full new state pension will rise from £221.20 a week to £230.25 a week, an increase of £470 a year.
A triple lock review is now “inevitable” as new Department for Work and Pensions (DWP) figures are released. With the 4.1% increase to payments from next month, the full new state pension will rise from £221.20 a week to £230.25 a week, an increase of £470 a year.
Thomas Lambert, financial planner at Quilter, said in a warning to the 13 million UK state pensioners: “A far smaller percentage of pensioners received income related benefits in 2024, sitting at 20%, down from 31% in 2010 and 37% in 1995.
“This decrease highlights the impact of rising incomes from the state pension and private pensions, reducing eligibility for benefits. Unsurprisingly, single pensioners were much more reliant on this state support to bolster their pension income.”
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Mr Lambert said: “As the coming generations move into retirement and the age of defined benefit schemes comes to an end, it is likely to reveal a significant gap in retirement provision and pensioner incomes may decline as a result. We appear to be nearing a juncture where there will soon be an inevitable review of the triple lock.”
“One potential reform to the triple lock is to link increases to earnings, with a temporary CPI indexation when inflation exceeded wage growth but generally falling in line with long term wage increases, helping align pension growth with the wider economy and creating a more predictable and affordable system,” he said.
“However, any change must be handled carefully. The state pension is the single largest area of welfare spending and a vital source of income for millions.” PensionBee UK chief business officer, Lisa Picardo, admitted that it was “disheartening to see that pensions have been sidelined in the Spring Statement”.
“While there are a lot of important issues being addressed, there is growing evidence that millions of Britons are simply not saving enough for retirement, and the government has chosen to overlook potential ‘quick-win’ reforms that would signal the importance and actively help individuals build long-term financial security,” she stated.Picardo continued: “Our proposals – including implementing a 10-day pension transfer switch guarantee, accelerating progress on auto-enrolment expansion and adopting a universal rate of tax relief – are all critical steps towards a fairer pension system that encourages better engagement and investing to achieve better retirement outcomes.
“As the first statement from a new government, it potentially sets a worrying tone for the years ahead – suggesting that these types of pension reform are not a priority. We cannot afford to keep kicking the can down the road when it comes to pension reform. Every year of inaction risks leaving more people financially vulnerable in later life.
“While we welcome discussions around the future of pension policy, we need decisive action, not just words. If we are serious about ensuring financial resilience for future generations, then the government must prioritise these long-overdue reforms.”
