The vast majority of UK pension professionals doubt that the pensions triple lock will exist in its current form in five years, a new survey has found.
The Pensions Management Institute's (PMI) poll suggests that 81% are sceptical about the future of the triple lock, which increases the state pension every year in line with inflation, rising average wages, or 2.5%, whichever is highest.
A broad dissatisfaction with the government’s handling of pensions policy was also found, with just 49% of respondents satisfied with the direction over the last six months, down from 61% in June 2021.
Looking forward to the next six months, 56% of pension professionals said that they are pessimistic about the direction of pensions policy, with only 40% optimistic, down 10% from last year.
Furthermore, the findings show that just 32% are satisfied with the government’s handling of the increase of the normal minimum pension age to 57 from 2028, with complaints including a lack of clarity and communication with the public.
“Our research suggests that the government faces an uphill climb to convince the industry that it understands the most pressing issues and is taking action to tackle them,” said PMI vice president, Rosie Lacey FPMI.
“The lukewarm feelings of those surveyed about the direction of pensions policy over the past six months and the six months ahead should be cause for reflection among officials.
“Questions about the future of the pensions triple lock and the handling of the increase to the normal minimum pension age seem widespread. These are surely issues which the government should confront if they wish to have the confidence of the pensions industry.”
Despite this sense of dissatisfaction in the industry, 58% of those surveyed have been happy with the work of the Pensions Regulator (TPR) over the past six months, with only 34% dissatisfied. In addition, 67% are confident that the regulator will focus on the right areas in the next six months, up from 57% in June 2021.
The PMI Pulse survey also uncovered some areas for improvement in terms of diversity and inclusion. Almost half of respondents said that their board did not have a policy covering this issue, and just over a quarter said that they did.
The majority of those surveyed recognised the benefits of diversity and inclusion, with 58% mentioning the avoidance of groupthink, and 55% citing more accurate representation of scheme membership as the biggest benefits.
“In contrast to the respondent’s feelings about the future of pensions policy, those surveyed seem satisfied with the work of TPR’s actions over the past six months and confident in its direction for the months ahead,” Lacey continued.
“Clearly there are mixed feelings amongst the pensions professionals about the current state of the industry and what lies ahead.”
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Author: Chris Seekings