There is also speculation that the State Pension age could increase a decade earlier than planned.
The cost of living crisis is set to continue into 2023 making it important for everyone nearing retirement age, or those already drawing their State Pension, to understand the implications of changes that could affect savings, pensions and investments.
State Pension Triple Lock The State Pension Triple Lock, the guarantee which increases State Pensions by the highest of Consumer Price Inflation , earnings increases or 2.5% each year, is being honoured in April. Steven explained: “There’s a big question over whether the Triple Lock can be sustained in future years, when both price inflation and earnings growth are high and subject to sharp changes.
Steven said: “The State Pension is a significant part of most people’s retirement income so it’s important to understand when you’ll receive it so you can plan ahead to make sure you have adequate private or workplace pensions.”Freezing the income tax thresholds With inflation particularly high, and pay increases for many also higher than in recent times, the freezing of income tax thresholds again in April will mean more people find a wage increase takes them into a higher rate tax band.
Essentially this means making a higher contribution to your workplace pension which would then bring your earnings under the higher income tax threshold, resulting in higher take home pay over the year.
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