Some good news for pensioners but plenty more needed to ensure pension assets do more to boost British growth
- Some good news for pensioners but plenty more needed to ensure pension assets do more to boost British growth.
State Pension Triple-Lock: Very good news that the uncertainty for pensioners is over. The Chancellor has confirmed the full 8.5% ‘triple lock’ earnings uprating promise for next year’s State Pension.
It would have been very wrong to remove pensioner protection again, after breaking that Manifesto Commitment two years ago. Millions of pensioners (especially women) rely on their State Pensions to make ends meet. Inflation may have halved but is still high. Forecasts that it will fall further are just that, forecasts. Pensioners must not be left out if inflation resurges, as the announced increase will run until April 2025.
That is not to say the triple lock pledge in future is the best policy option for pensioner protection. The reality and complexity of our pension system mean it has achieved its original purpose of restoring State Pensions post-1980s losses relative to the rest of society but, in actuallity, it gives lower increases to the oldest and poorest pensioners which is not just. I believe a comprehensive, cross-party review of State Pension uprating is needed, investigating better ways to control costs rather than just scrapping the triple lock.
important reforms for UK pensions: The Chancellor’s Autumn Statement also announced important reforms for UK pensions. Using pension assets to boost domestic growth, as well as backing British companies, are all important measures for our country’s post pandemic and post Brexit future. Measures to improve supply-side by supporting entrepreneurs, cutting business taxes, bringing in foreign direct investment and backing future technologies, are all welcome measures.
Despite disappointment about the absence of widely-anticipated measures to ensure ISA savers do more to back British growth, the Chancellor clearly intends to direct more taxpayer funding into UK start-ups and small businesses from pension investors. This is a welcome change which takes the opportunity to direct pension funds into domestic assets, rather than potentially all being invested abroad. At a time when boosting sustainable growth and reviving British financial markets are so important, this is good news.
The Chancellor’s announcements to establish special Growth Funds, Long-Term Asset Funds and other collective asset pools that will allow pension investors to directly support growth and the new technologies of the future, were confirmed. The funds will mean pension investors can diversify into these types of investments, taking advantage of specialist expertise and scale which they may not individually have.
Overall, the Autumn Statement could bring better incomes in future from both State and Private pensions. Britain’s pension system was once the envy of the world – perhaps these measures can pave the way for future reforms to restore such former glory.