Following the Government’s announcement that the pension triple lock will change from April 2030,we have commentary from Tim Grimsditch, Managing Director of Unbiased, the UK’s leading financial advice platform.
Tim says the announcement should be a wake-up call for people who are still working: while the State Pension will remain an important part of retirement income, getting yourself financially “retirement ready” is becoming increasingly important.
Tim says:
“The pension triple lock is changing, and that is an important shift for millions of people planning for retirement.
For years, the triple lock has provided some certainty over how the State Pension will increase, with payments rising each year by the highest of inflation, average earnings growth or 2.5%. Any move away from that system means people will understandably want to know what replaces it and what that could mean for their future retirement income.
But the bigger message for people still working is that getting yourself retirement ready is becoming even more important.
The State Pension is likely to remain an important part of retirement income for millions of people, but it shouldn’t be the only thing you rely on when planning your financial future. If the rules around how it increases are changing, it becomes even more important to understand what you are building for yourself.
That means knowing how much you currently have in workplace and private pensions, checking your State Pension forecast, understanding what you and your employer are contributing and working out whether you are on track for the retirement you want.
For many people, retirement can feel a long way off, which makes it easy to put off thinking about pensions. But the earlier you understand where you stand, the more time you have to make adjustments.
That might mean increasing pension contributions when you can afford to, making sure you are getting the most from employer contributions, tracking down old pension pots or simply reviewing your retirement plans regularly rather than leaving everything until the final few years of your working life.
Changes to the triple lock are a reminder that government pension policy can change over the course of your working life. You cannot necessarily control those decisions, but you can take greater control of your own retirement planning.
The more prepared you are yourself, the better placed you should be to adapt to future changes and build the retirement income you need.”
Photo by SHVETS production: https://www.pexels.com/photo/elderly-woman-reading-a-document-7545328/
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