A reduced workforce in years to come may not be able to sustain the rising costs of the State Pension.
Lower birth rates coupled with a population that is living longer could be the catalyst for change when it comes to the State Pension Triple Lock and retirement age. The Triple Lock is the guarantee which increases State Pensions by the highest between September’s Consumer Price Inflation , earnings increases or 2.5 per cent.
Earnings growth is currently the highest of the three Triple Lock metrics, reaching 7.8 per cent in June compared with the same period 12 months earlier. CPI inflation rate dropped to 6.8 per cent in July, and is expected to fall further in August, but wages could be the deciding factor as the all-important figure will be announced mid-Septemnber.
“It’s time to take a step back and look at what needs to happen to the State Pension long-term to give people certainty about what they will receive and when. With a general election looming it is understandable that this is an issue UK Government will not want to address right now but a review of the State Pension is something that needs to be addressed in the very near future.”
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