Press Release of the Day – 18th June
Future of pension triple lock: “The last few months have upended the lives of all generations”, Killik & Co
Svenja Keller, head of wealth planning at Killik & Co. says: “There have been rumours for a while that Rishi Sunak will end the triple lock pledge to help pay for the Covid-19 fallout, and there is no doubt that a number of significant changes lie ahead – with a possible emergency July budget to announce them. There are pensioners who fully rely on the State Pension, and one of the realities of the Coronavirus crisis is that even those with comfortable private and workplace pensions who were looking to retire in the next few years may have seen the value of their retirement pots fall. However, the last few months have upended the lives of all generations. Younger workers are more likely to have been furloughed, so some have now questioned whether a State Pension rising above the pay of workers should remain in place in its current form.
“If the triple lock is removed, those already receiving the State Pension will see less increases in their State Pension in the future. They will have to incorporate the lower increases into their financial plan although once retired, it will be more difficult to adjust the plan and make up for the lower increases from elsewhere. Therefore, they may need to consider their expenditure, as this is what they will have more immediate control over.
“The reality is, all generations need to protect their savings from inflation. It is very important that inflation is taken into account when putting financial plans together as – despite recent figures – it has a huge impact in the long-term. Younger savers have the chance to think about this now: identify and ring-fence long-term savings and make use of compounding over time.”
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