Pension warning as ‘inflation shock’ may affect your retirement plans | Personal Finance | Finance
Inflation has soared recently, and is even expected to climb higher, potentially to eight percent. This will have substantial impacts on the spending power of Britons, a major concern for those entering retirement.
Uncertainty was sparked this year due to the suspension of the triple lock, but the measure intended to protect pension income in real terms, will be making a return next year.
In addition, 33 percent of those asked believe their company pension will rise in line with inflation.
Will Hale, CEO at Key Later Life Finance, said: “Retirement planning can be complex at the best of times so it is easy to understand how some people can find it daunting to take into account factors like inflation.
Financial challenges have plagued millions of people right across the country.
However, it is not just the here and now that Britons will have to take into account, but their futures.
Mr Hale stressed this matter, urging individuals to take action where they possibly can.
He continued: “The importance of future proofing your finances is clearly moving up the agenda.
“When you compare retirees with those over-55s who are still working, you can see that the recent inflation shock has encourage people to plan more carefully.
“No one wants to find that as they age, they need to cut back more and more just to make ends meet.
“Saving as much as possible for retirement and careful planning is clearly important.
“It is also vital to consider all your assets and to explore different options – whether it is accessing your housing equity, boosting your tax-free savings or downsizing.”
Also of note is the regional differences between those who have taken inflation into account, and those who have not.
Northern Ireland was found to be the best prepared, with 52 percent of those asked having factored in inflation.
This was followed closely behind by the North East, South East and the West and East Midlands.
However, some areas are lagging sharply behind and may need to take further action with their plans.
Only 30 percent have prepared in the North West, 33 percent in the South West, and 34 percent in Wales and Yorkshire.
