Experts shared mixed reactions to prime minister’s speech at Labour Party conference.
The pensions industry called for a wider review of pension adequacy following the prime minister’s speech on changes to the triple lock yesterday (Tuesday).
Zoe Alexander, Pensions UK’s chief policy officer said: “The triple lock has played an important role in restoring the value of the State Pension and giving millions of older people greater financial security. Pensions UK has recognised for some time that eventually it would need to end.
“The removal of the triple lock makes the case for automatic enrolment reform more urgent. The government must support rises in contributions and a more inclusive system so that people stand a chance of building the retirements they expect.”
She added that Pensions UK welcomes keeping the state pension ahead of inflation, but stressed that assessing it relative to earnings will be critical, calling for an independent body to regularly evaluate overall pension adequacy to protect living standards as part of wider reforms.
John Ditchfield, founder and chief executive officer at Harmonic Financial Planning, also joined in the debate and urged the government to use this opportunity to introduce workplace pension reforms to support the UK’s four million self-employed savers.
He said: “We should welcome the end of the pensions triple lock from 2030, a policy that unfortunately has become totally unaffordable. But the government must use this moment to bring in wider reforms including a second wave of workplace pension reforms to support a generation of forgotten savers including the UK’s four million strong self-employed. The evidence is very clear, we need an auto enrolment equivalent for the self-employed combined with greater consumer awareness around pension savings.”
However, some experts argue that too much reform could overwhelm the pensions industry considering the wholesale defined contribution (DC) and Local Government Pension Scheme reforms with which it already has to contend.
Change could also undermine savers’ trust in the system. My Pension Expert research shows almost eight in ten over-55s are concerned that changes to the State Pension or triple lock could leave them financially worse off, while 61% say frequent speculation makes it harder to plan confidently for retirement.
