Phoenix Group welcomes the government’s confirmation of the state pension triple lock as a protection for vulnerable pensioners, but we're concerned over its long-term future 

“Pensioners have been on tenterhooks waiting for confirmation from Rishi Sunak’s government on reinstating the state pension triple lock for 2023/24, so today’s announcement will be welcome news for the millions relying on these payments. Many of the most vulnerable pensioners are struggling to meet the demands of the rising cost of living and have already faced a below-inflation increase in payments last April.

“While the government has committed to the triple lock in the immediate-term, there are real concerns about whether this will be maintained in future years. Research on attitudes towards the state pension from Phoenix Insights, Phoenix Group’s longevity think tank, found around a third (34%) of adults in the UK are fearful that the state pension won’t exist in the future. However, the majority believe that providing the state pension is an essential role for the government in order to ensure everyone has a minimum level of income in retirement¹.

“If we do see reforms in state pension provision, it is important the most vulnerable are protected from pensioner poverty. For most, relying on the state pension alone won’t provide an adequate income in retirement. And, with the state pension age set to rise to 67 and then 68 in future years, now is a crucial time to think about how we can best support individuals to build confidence in their financial futures.”

Government has announced today that it will be publishing its review of the state pension age 2023

“Nearly half of the population rely on the state pension for the majority of their income later in life. There is a pressing need to support people through the expected transition to a later pension age – especially those facing health issues, redundancy or caring responsibilities, who are among those most likely to be negatively impacted.

“We have been calling for the Government to reinvest up to £1billion of the potential savings that will come about if it raises the state pension age again, to support those most negatively impacted by a rise. Reinvesting just a fraction of the money that is likely to be saved by any increases to the state pension age will help more people stay in work longer and support those for whom that is simply not feasible. We hope that the outcome of the Pension Age review looks to support those who will be impacted the most.”

“We know people worry that health issues, caring responsibilities and having the right skills will prevent them from working for longer – so it’s clear that raising the state pension age without a plan to help people earn or save more is a recipe for disaster.  Living longer is one of the greatest gifts of the 21st century, but it’s one the UK really needs to plan for.”

Based on its findings in its Reaching a certain age report, Phoenix Insights recommends a package of support measures that includes:

• An engagement campaign to target those who will be affected first by any change
• Greater investment in tailored job support and preventative workplace health programmes, and support for working carers for people during the five years before the new state pension age
• A programme of support from mid-life onwards, including mid-life MOTs, age-inclusive campaigns, access to lifelong learning and preventative health at work programmes.

The last state pension age rise enabled approximately £4.9bn of savings. Assuming a similar saving would be made by the next increase, a reinvestment of 10-20%, or £0.5bn-£1bn, would still enable a net gain for the Exchequer of 80-90%, or £3.9bn-£4.4bn, in savings.

Some key findings of Phoenix Insights Research into the state pension:

• 84% of people believe that providing the State Pension is an essential role for government
• one in three (34%) think that there probably won’t be a State Pension by the time they retire (including half of 18-24s (49%) and over half of 25-49 year olds (53%)).
• The public’s considers health (65%), individual circumstances (64%) and ability to do the job (61%) factors that should determine when a person stops working
• 76% of people support the idea of early access to the state pension for people who are unable to continue to work, for example due to health reasons
• 69% of people believe that the Government should 'top-up' the incomes of low-income pensioners, to make sure that they have a reasonable standard of living

Conservative voters (61%) were more likely than Labour voters (56%) to agree that with people living longer, we should be prepared to pay more taxes to properly fund state pensions

Phoenix Group welcomes the government's support to help over-50s back in to work

“Rising economic inactivity, particularly among people over 50, is one of the most critical issues in our labour market right now, and so we warmly welcome the government’s commitment to undertake a thorough review of adults who have left the workforce. Individuals out of the workforce may find it challenging to get back on the career ladder, so government action will be essential to removing some of the barriers they face.

“However, action is needed now to reverse the trend of over-50s out of work and employers play a vital role in this. Research from Phoenix Insights, Phoenix Group’s longevity think tank, found there are a combination of factors that have contributed to the ‘Great Retirement’ in the UK, including negative attitudes towards remaining in employment². The onus is on employers to change this perception through enabling flexible working, supporting staff with caring responsibilities, tackling age-bias in recruitment and investing in lifelong learning.

“As well as the impact on income, not working can have damaging impacts on long term financial security, with the later years providing a real boost to retirement savings. We need to help individuals stay in work for as long as they want and need in order to build financial security and wellbeing to and through retirement.”

1 Phoenix Insights (2022) 'Reaching a certain age': Public attitudes to the state pension (London: The Phoenix Group) 

2 Phoenix Insights (2022) What is driving the Great Retirement? (London: The Phoenix Group)