State pension alert as policy needs to be 'year one priority' for Labour Government

The new Labour Government needs to make it a 'year one priority' to clarify the future of the state pension, an expert has warned.

Steven Cameron, pensions director at wealth firm Aegon, told Express.co.uk: "The future of the state pension faces significant challenges due to the UK’s aging population and increasing life expectancy.

"Combined with the high cost of living, these factors are placing great demands upon and straining the pension system, leading to an increased financial burden on the Government.

"This issue is likely to become even more urgent within the next few decades, as the demographic shift accelerates.

"We expect Labour to formulate and begin sharing their long-term plan for controlling these concerns once they’ve completed their promised review of the entire UK pensions landscape. This should be a ‘year one’ priority."

Labour has committed to retaining the triple lock. Mr Cameron commented: "We’ll find out just what next year’s Triple Lock increase will look like towards the end of 2024, with Rachel Reeves likely to confirm the figure in her first Autumn Statement as Chancellor.

"More widely, there is also Labour’s promised review of the complete UK pensions landscape, which could have far-reaching implications for all aspects of workplace and private pensions."

Aegon is also calling on the Government to set up a Pensions and Savings Commission within its first 100 days in office to provide clarity on reforms to pensions, including the state pension.

Mr Cameron said: "In the shorter term, we look forward to the King’s Speech next week, in which the new Government’s main priorities will be shared.

"However, our current thoughts are that it will be too early to include a new Pensions Bill at this stage. Such a Bill is more likely to be one for 2025, once the Labour government, with Emma Reynolds as the new pensions minister, has had time to undertake its promised pensions review.

"Alongside any fresh ideas they may have, it will be interesting to hear which of the in-motion policy initiatives Labour will decide to continue with, change or cancel."

A survey by Aegon found just 13 percent of over 50s feel more positive financially going forward under a Labour Government, while one in four said they feel less optimistic.

This compares with 24 percent of under 50s feeling more positive after Keir Starmer's team won the General Election.

Mr Cameron gave his thoughts on the figures: "We believe the lower financial confidence of over-50s, as identified in our findings, is likely due to a number of factors such as a lack of preparation earlier in life, closeness to retirement – whatever that may look like for different people – and challenges like the cost-of-living crisis, which has affected the plans of, and ‘squeezed’, many who are in what we call their ‘Second 50’ – the second half of a longer, multi-stage life.

"Instilling confidence in savers and retirees is a fundamental part of the pensions puzzle, helping people to make better decisions and get the most from what they have – and that includes the state pension."

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