The State Pension forms the very backbone of our retirement income. In fact, recent Department for Work and Pensions (DWP) data showing the average State Pension payment is around £200 a week.
It makes a huge contribution to pensioner budgets and there are very few people who don’t rely on it to some extent.
However, a combination of an ageing population and shrinking workforce has put the State Pension under pressure, leading to concerns as to how sustainable it is.
This article isn’t personal advice. If you’re not sure what’s right for you, ask for financial advice. Remember, pension and tax rules can change, and any benefits depend on individual circumstances. You also can’t access money in a pension until age 55 (rising to 57 in 2028).
Could we see changes to the State Pension?
There’s ongoing debate as to whether the triple lock should remain as the measure used to uprate the State Pension or whether it’s too expensive.
The triple lock aims to increase the State Pension by the highest of 2.5%, average earnings growth or CPI inflation every year and has led to some blockbusting increases in recent years.
Other rumours centre on whether the State Pension age will need to rise in a bid to manage costs or if State Pension should actually be means-tested.
Rumours like this can be concerning, but our research* shows that only one in 10 people don’t believe the State Pension will exist by the time they get to retire.
A further 21% said not only did they believe the State Pension would still exist, but that the triple lock would still be used to uprate it on an annual basis.
A further quarter (24%) said they thought the State Pension would still be a feature, although they didn’t expect the triple lock would survive. One in five thought there might have to be some kind of means-testing put in place.
However, there’s also a lot of uncertainty out there.
Over a quarter of people said they didn’t know if the State Pension would still be around by the time that they retire. It’s certainty that people need if they’re to plan for the long-term.
The State Pension and the triple lock’s role within it needs to be at the heart of the government’s ongoing pension review to make sure it’s put on a sustainable footing. That way people can plan for their future without fear of major change.
*Survey of 1,600 people carried out by Opinium on behalf of HL in September 2024.
The age at which you can claim the State Pension, and how much you’ll get, is different for everyone. Download our guide to fund out:
When you can claim the State Pension
How much income you might get
What happens if you were contracted out
Ways to boost your State Pension income
Plus much more
Will you need more than the State Pension?
While the State Pension is the backbone of people’s retirement income, it’s important you supplement it with your own retirement savings. This could be through a workplace pension or a private pension like a Self-Invested Personal Pension (SIPP).
The latest data from HL’s Savings and Resilience Barometer shows only 38% of households are on track for a moderate retirement income. So, clearly there’s still more to do.
Small actions like upping your pension contributions when you get a pay rise or new job is one way to boost your contributions.
You should also make sure you’re making the most of any contributions your employer is making.