Rishi Sunak vows to maintain state pension triple lock

interactive investor comments on the chancellor’s confirmation that the pledge will be upheld.

Commenting on news that Chancellor Rishi Sunak has vowed that the Government will stick to its triple lock pledge for settling increases in state pensions, Moira O’Neill, Head of Personal Finance, interactive investor, says: “The news comes as no real surprise, as any dilution of the pledge would not have gone down well with savers – especially given the impact of the coronavirus pandemic on retirement savings. 

“However, I think you have to be very brave to rely on the state pension. Future governments can change this, and you should prepare for them to do so. 

“The direction is only up in terms of the age at which you receive it and possibly down in terms of the amount you’ll receive. People in their 30s and 40s should potentially be prepared not to get it until they are 70. You’ll need to plug the gap with private pension provision, and up your contributions where you can. Even very small additional monthly contributions of say £25, can add up to large sums over time due to the power of compounding. 

“Women in particular need to take pensions seriously. Make sure you are making your own contributions. Career breaks can get in the way but as a family you might be able to redistribute contributions. In the sad event of divorce, make sure you consider pensions as part of the overall financial package – too many don’t.”