There has been a lot of debate about the state pension and the triple lock across the media in recent weeks.
Kicking things off for this week was the failure of Prime Minister Rishi Sunak to confirm backing for the system long term with the Telegraph seizing on his lack of enthusiasm.
Then an article from former Conservative leader and foreign secretary William Hague for the Times suggested that ‘It’s time to unpick the triple lock on pensions.’
The Guardian reported that "'Government insiders’ believe they can justify ‘tweaking’ the triple lock formula that decides pension increase in order to save £1bn".
With the pension due to rise 8.5%, the paper reported that the government was considering stripping out public sector bonuses awarded to workers to prevent strikes over the summer, and using an earnings figure tracking the underlying level of pay growth. The resulting increase might then be around 7.8%.
So far, so stealthy, obviously briefed from inside government but also deniable.
About 28% of over 55-year-olds will purely rely on state pension on the state pension in retirement, as Money Marketing reports.
The Interactive Investor survey also found that more women than men (32% as opposed to 20%) are set to purely rely on the state pension for retirement.
The same amount of 18-34-year-olds as the over 55-year-olds will be solely reliant on the state pension with a slightly lower number for the 35-54-year-olds (23%) on current plans.
There is a lot to consider here. First the tense used in the story! Some of these age groups have time to start building up pensions.
Second, this story and others have provoked some interesting debates on social media and actually for once I think it might be worth noting one discussion on X/Twitter. The Lang Cat’s Mark Locke produced a thread under the heading "Some things to consider about the State Pension and #TripleLock, for Pensions Awareness Week.
This is perhaps the key tweet/xeet from Mark.
“State pensions are paid out of general taxation. It’s always been that way. There is no pot of money with your name attached. This is still quite a common misconception... “I’ve paid in all my life, I’m entitled to..”
He managed to get two former pension ministers and one former shadow pension minister, the Conservative's Guy Opperman, Lib Dem's Steve Webb and Labour's Gregg McClymont all to agree.
Interesting debate and a demonstration that X still has its uses in fostering financial services debates, amid the conspiracies and other online carnage.
But the awareness element is rather important. Most of the public and perhaps especially retirees simply do not see it that way. We might ask should the government and future governments be telling everyone that this is a benefit albeit a contributory one.
The FCA says it was “disappointed” to find evidence of poor advice in the lifetime mortgage space as part of the regulator's review of later life mortgage firms. Advisers profess themselves unsurprised.
The regulator says it will be intervening "robustly" with firms to ensure improvements are made, as FTAdviser reports.
One in six people have never reviewed their pension according to research by the People’s Partnership, as Corporate Adviser reports.
Around 24% of respondents examine their pension savings less than once a year while 20% do so yearly and 11% do so every six months.
Is that terrible news for a system such as auto-enrolment that relies on inertia to a reasonable degree? Debate and discuss.
Rental affordability is at its worst level for a decade, according to a new report from online estate agent Zoopla reported in Mortgage Strategy.
The company’s Rental Market Report shows that it now costs people, on average, 28.4% of their gross monthly earnings to cover their rent. This is compared to an average of 27.2% over the last 10 years.
Some renters may well feel that underestimates their recent experience. But it certainly underlines why it may make sense to get on the housing ladder.
This makes for rather grim reading for one big advisory operation. New Model Adviser suggests that concerns about tech systems and the flexible model plus perhaps much more importantly scrutiny over client cash and suitability may lie behind FCA restrictions at Raymond James.
Just an observation – firms which get into a bit of a tight spot regulation-wise may feel it is wise to batten down the hatches. But, within the law and their own ethical approach, publications are free to write what they want. This feels like a bit of a stand-off though of course Raymond James will be most concerned about the regulator, whatever its relations with NMA.
