Last week saw Chancellor Jeremy Hunt deliver his Autumn Statement, where he confirmed that the triple lock on the state pension would remain in place. However, in a budget centred around £55bn of tax rises and spending cuts, was this enough to provide hope to pension planners?
To get to the bottom of this, My Pension Expert commissioned a survey amongst over 2,000 UK adults aged 40 and above, to uncover their thoughts about the current government, in addition to how they are coping with the cost of living crisis.
Lack of confidence
In recent months we’ve seen increasingly turbulent conditions in Westminster, from Boris Johnson’s ousting after mass cabinet resignations to Liz Truss and Kwasi Kwarteng’s disastrous ‘mini-budget’, with Rishi Sunak becoming the UK’s third Prime Minister in the space of 7 weeks.
Naturally, this has all gotten a lot of attention, but our research found that 68% of people worry that this recent turmoil in parliament is distracting from the bigger issue of the cost-of-living crisis.
And as a result of Westminster distractions, people are understandably losing confidence in the government’s ability to reassure the markets. Over a third (36%) of those surveyed said they don’t think Rishi Sunak and Jeremy Hunt will be able to stabilise the pensions market, while only 18% said they have faith in the government’s plans.
Cost-of-living concerns
Contributing to this dip in confidence is record-high inflation rates, which has now reached a 41-year high of 11.1%. And even with the government providing additional financial support to pensioners – namely the reinstatement of the triple lock and energy support to vulnerable households, it seems more reassurances are needed.
My Pension Expert’s research found that Britons are already taking drastic measures to protect their finances during the cost of living crisis.
Shockingly, two-thirds (66%) have avoided turning on their heating, despite temperatures dropping dramatically in recent weeks. Almost two-fifths (38%) have taken fewer showers or baths, while 1 in 5 (20%) have even gone as far as to skip meals.
Reassurance and support
Of course, these are unnerving times for many people approaching or at-retirement, and it’s concerning that they feel the need to make drastic lifestyle changes to remain afloat.
Whilst it might be tempting to make a snap decision, it is vital that people remain calm and seek independent financial advice. Advisers, like our expert team at My Pension Expert, consider the entirety of an individual’s financial situation, as well as their future goals and the wider economic environment. Then, they are able to provide tailored recommendations to suit the individuals’ present and future needs.
Given the political and economic volatility in recent months, low confidence in pension policy, and indeed pension schemes, is understandable. However, Britons needn’t struggle alone. Advisers, like our team at My Pension Expert, are always on hand to provide expert advice to help people weather the storm. And from there, they can begin to confidently plan for a secure financial future.