Earlier this year the government announced a major overhaul of the UK pension system and at the end of November the chancellor will explain exactly how next year’s increase will be calculated.
Whilst the Government changed the inflation measure used for increasing state pensions to be in line with a CPI inflation measure (and not just earnings), its been left to the Chancellor to decide whether to use the normal September figure or to choose an alternative figure, for example base on average annual inflation over time.
He will announce his decision at the end of November and give details of exactly how next year’s increase will be calculated and how much more pensioners can expect.
Te issue is though that many pensioners and those nearing retirement age have more questions about the pensions system. They are struggling as a result of the high inflation (albeit it has fallen back slightly to 5%) and Bank of England’s interest rate policy – what will the Government do about the impact on annuities? Are we about to see some major overhaul of the regulations on annuities?
And what about pension savings for the future? How will auto enrolment into employer pension schemes work? Do pensions have an image problem? And will pensioners be able to dip into their pension pots earlier than they currently can?
Pensions minister Steve Webb was interviewed by Saga Director General – and former government pension’s advisor – Ros Altmann, who raised a number of questions on behalf of the Saga generations. Here’s a video of the highlights.