In a groundbreaking move, Jeremy Hunt plans for pension reforms and announced he’ll consult on giving people one pension pot for life. He also put pensioners minds at rest with confirmation on the State Pension triple lock.
These announcements represent a significant step in the right direction, marking a transformative change towards a more positive and secure retirement landscape.
Here’s how these announcements could impact your retirement.
This article isn’t personal advice. If you’re not sure what’s right for you, ask for financial advice. Pension and tax rules can change, and benefits depend on your circumstances.
New lifetime pension call for evidence
In Wednesday’s autumn statement, the chancellor announced a call for evidence on the introduction of a lifetime pension. This visionary pension model could reshape retirement planning and the industry.
What is a lifetime pension and how could you benefit?
A lifetime pension would allow people to have one pension throughout their working life, regardless of how many jobs they might have.
Rather than having a workplace pension automatically chosen by their employer, it would allow people to choose their own pension provider and their employer would have to make contributions into the chosen pension scheme. This could have a transformative effect on people’s retirement planning.
Given that research from the Pensions Policy Institute estimated a pile of 2.8mn lost pension pots, this pension reform could be a gamechanger.
With people frequently moving jobs, a lifetime pension could mean people will be less likely to lose track of their pensions from previous employers. And with just one pension pot, people will have a better view of what they've built up, leading to more informed retirement decisions.
Currently, there’s no date for when a lifetime pension option might come into effect. And it could take a long time due to the complexities and vast amounts of people this would impact.
In the meantime, you could consider transferring any old workplace pensions so that they’re all under one roof. It could help you keep track of your hard-earned pension savings. You’ll have a clearer overview of your overall retirement income, and you’ll only have one account to manage giving you a more well-rounded view.
Before transferring, check for loss of benefits, guarantees or high exit fees.
Save money with the return of our biggest ever cashback offer
Save money with the return of our biggest ever cashback offer
Transfer pensions to HL and you could get between £100-£3,500 cashback as a thank you. You can use it to top up your investments, put it towards fees or withdraw it to your bank account.
To get this offer, you need to register your interest first and start your transfer by 29 February 2024. Terms apply.
| You transfer | We give you |
|---|---|
| £10,000 - £29,999 | £100 |
| £30,000 - £59,999 | £250 |
| £60,000 - £89,999 | £500 |
| £90,000 - £109,999 | £1,000 |
| £110,000 - £124,999 | £1,250 |
| £125,000 - £999,999 | £1,500 |
| £1,000,000+ | £3,500 |
The State Pension will rise by 8.5%
Wednesday’s announcement will be greeted with relief by pensioners who’ve been struggling with the rising cost of living. The government has committed to the State Pension triple lock, meaning that State Pension income will rise by 8.5% from April 2024. This will be the second significant increase in a row.
For someone receiving the full new State Pension, their pension income will grow from £203.85 to £221.20 each week. For anyone receiving the full basic State Pension, their income will rise from £156.20 to £169.50 every week.
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Article image credit: Leon Neal/Getty images