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The state pension is the backbone of our retirement income — there are very few people who are not reliant on it to some extent. This means we need certainty in terms of what we are due to receive and when, so we can plan with some degree of confidence.
Over the past decade or so the state pension’s value has been upheld by the triple lock. This aims to uprate the state pension by whichever is highest of 2.5%, average wages or consumer price index (CPI) inflation. It has led to some blockbusting increases in recent years, and the cost of it has fuelled concerns around the state pension’s sustainability long-term.
One of the most popular levers to manage cost has been to increase the state pension age and it is expected to increase to 67 by the end of the decade, with the shift to 68 slated for the mid-2040s.
However, there have been calls to accelerate these hikes still further. It’s a tricky decision as the reality is that many people’s health could mean they would find it extremely difficult to keep working until their late 60s.
Read more: How the budget could affect your pension, from tax relief to national insurance
So, do people value the triple lock enough to potentially work longer in order to keep it?
Only one quarter (24%) of people said they would be willing to work until the age of 70 to keep the triple lock, according to a recent survey by Hargreaves Lansdown. More than half (54%) said they wouldn’t be willing and a further 23% said they were unsure.
When looking into the results, there were clear differences based on people’s ages. One-third of people aged between 18-34 said they would be willing to work longer compared to only 18% of those aged over 55.
This is perhaps not surprising. At 55 the prospect of retiring looms ever larger and you may be very wedded to your current state pension age and so be unwilling to give it up.
For younger age groups the prospect of retirement seems like light years away and the idea of working an extra couple of years may not seem so bad. It does, however, suggest that younger age groups value what the triple lock does.
Adequacy will be a vital component of the government’s ongoing pension review, and the state pension should be an important part of the debate.
With an ageing population we need to make sure the state pension is placed on a stable footing for many years to come so people can continue to use it as the basis of their retirement planning.
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