The State Pension has an important role in ensuring people are able to maintain a basic standard of living once they retire. For the State Pension to be sustainable and fair across generations in the long- term, the Government has reformed the amount of the State Pension, the amount it is increased by year on year, and the age at which individuals will start to receive their pension.
The Government has:
- set the new State Pension at a level it has determined will enable pensioners to maintain a basic standard of living and avoid poverty during their retirement.
- introduced the “triple lock” to ensure that pensioners’ incomes rise in line with increases in living cost. This lock guarantees to increase the State Pension by whatever is the highest of three factors: inflation, average earnings or a rate of 2.5%. This means that the costs of funding pensions will significantly increase over time, which has raised issues of intergenerational fairness, where average earnings are not increasing at the same pace.
- committed to increasing the State Pension age year on year to keep pace with increasing life expectancy. Our work below highlights the challenges and benefits around increasing the state pension age including how to fund it, the rate of increase, and a review of pensions’ tax credits and benefits.
The working party disbanded in September 2022.
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