Pensioners Set for a Golden Age!

Good news for those approaching retirement – experts are saying your income could be boosted significantly in the next five years!

The government’s “triple lock” guarantee means that your state pension is set to rise at a faster rate than inflation, meaning your purchasing power will increase. This means you’ll be able to buy more with your money!

What is the triple lock?

The “triple lock” is a promise to ensure that the state pension increases by the highest of:

  • Inflation: The rate at which prices are rising.
  • Earnings growth: How much wages are increasing.
  • 2.5%: A fixed minimum increase.

Both the Conservatives and Labour have promised to keep the triple lock in place, so it doesn’t matter who wins the next election.

How much will my state pension increase?

The analysis suggests that those on the new state pension could see their weekly payments increase by at least £32 by 2029. That’s an extra £1,660 per year!

Next year alone, the state pension is expected to rise by 3.7%, pushing the full annual state pension from £11,540 to £11,970 – a £430 increase.

For the following four years, the state pension is set to rise by at least 2.5% each year, as inflation and wage growth are predicted to be at or below this threshold.

What about private and workplace pensions?

While the triple lock guarantees a rise in the state pension, your private and workplace pensions are also expected to see growth. These have been hit hard in recent years due to high inflation and market volatility, but things are looking much brighter.

Pension funds have started to perform better over the past year, and many savers are already seeing their pots grow faster. Those who are far from retirement have seen a 13% return on their funds in the past year, up from an average loss of 9% in 2022.

What should I do?

While the future looks promising for pension incomes, it is still important to take steps to ensure you are getting the best return on your savings.

  • Review your pension funds: Make sure your investments are aligned with your risk tolerance and retirement goals. If you’re nearing retirement, it might be a good idea to switch to a lower-risk fund.
  • Set a retirement date: Let your pension scheme know when you plan to retire, so they can adjust your investments accordingly.
  • Don’t panic! While the markets can be volatile, the long-term outlook for pensions is positive.

Remember, this is just a snapshot of the current situation. It’s always a good idea to speak to a financial advisor to discuss your individual circumstances.