State pension payments will be the “elephant in the room” for politicians at the next General Election, experts have said.
Questions have been raised as to whether the benefit’s triple lock is “sustainable long term” due to the cost levied on working-age people.
Prime Minister Rishi Sunak and Labour Party Leader Keir Starmer are being urged to tackle the issue at the next General Election which is expected to take place in the later half of this year.
This is the Government’s pledge to raise the state pension every year by the highest out of the rate of inflation, average earnings or by 2.5 per cent.
The state pension's long-term viability is being questioned
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From April, pensioners are set to see an 8.5 per cent hike to their payments but questions have been raised as to how “sustainable” the benefit will be going forward.
Taxpayers pay for the current generation of state pension recipients through National Insurance, which was recently slashed by the Government to secure votes before the General Election kicks off this year.
Steven Cameron, the pensions director at Aegon, noted that Britons are becoming increasingly optimistic about their finances but older households are more likely to be concerned about the future.
He explained: “Those on a fixed income continue to face a tricky time ahead, and that includes many pensioners despite the inflation busting 8.5 per cent rise in the state pension from this April due to the triple lock.
“The elephant in the room remains whether the triple lock is sustainable long term. The state pension is a lifeline to millions but is very costly for today’s workers to fund from their National Insurance.
“We urge all political parties to make their state pension intentions clear ahead of the General Election. It could have a major influence over voting preferences.”
According to a recent survey of 2,000 adults carried out by Aegon, 38 per cent are feeling negative about their finances going into 2024, with 52 per cent feeling positive.
Overall, males are 11 per cent more likely to be feeling good about their personal finances than females despite the cost of living crisis.
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The state pension will increase by 8.5 per cent in line with the triple lock
GETTYNotably, those aged between 50 to 59 are feeling the most negative about their money situation with as many feeling bad about financial prospects as those feeling positive.
This is the generation that is within touching distance of the state pension age, which is currently 66.
From April, the full new state pension rate will rise from £203.85 to £221.20 a week, which is the equivalent of £11,541.90 a year.
In comparison, the full basic state pension will increase to £169.50 a week from a rate of £156.20. As such, recipients entitled to the full amount will get an annual payment of £8,844.27.
