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State pensions to become less generous, say experts

By Damian Clarkson

Published 24/08/2015

The state pension will change to a less generous system in the coming years, analysts believe. Picture posed
The state pension will change to a less generous system in the coming years, analysts believe. Picture posed

The state pension will change to a less generous system in the coming years, analysts believe.

A survey of more than 200 financial advisers by multinational life insurance, pensions and asset management company Aegon found that just 4% expect the current system to remain in place 30 years from now.

Of the 96% anticipating change, almost half said people will have to work later in life before they can claim, while four in 10 (39%) believe the Government will have to means test pensions so wealthier retirees get a smaller payout.

A similar number (41%) expect a move away from the current triple-lock guarantee, which states pensions must increase annually by the higher of inflation, average earnings or a minimum of 2.5%, and become less generous.

Duncan Jarrett, retail managing director at Aegon UK, warned that any change in the state pension could leave the public unsure about their own retirement plans.

A spokesman for the Department for Work and Pensions said: "Our pension reforms will give those ready to retire the security and independence to plan for the future."

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