Record inflation rates continue to impact UK pensioners

Record inflation rates continue to impact UK pensioners

13 Apr 2022

The latest record high CPI announcement from the ONS this morning will hit the pockets of UK pensioners hard. In addition, the UK state pension will increase by just 3.1% in April, less than half of the 7.0% increase in inflation over the year to March, and well under the 8% that pensioners would have received under the recently suspended triple lock commitment. As energy prices keep soaring and the cost-of-living increases, UK pensioners will continue to be squeezed even further.

Analysis from XPS Pensions’ DB:UK Funding Watch has found that the 0.5% increase in long-term inflation expectations since July 2021 has added £140bn to UK DB scheme liabilities. While this shows that most workplace pensions have some inflation protection in place, annual increases tend to be capped at 5% or lower. So, even though there is some degree of protection for UK pensioners, it will have a limited impact in a high inflation environment that is only expected to get worse before it gets better.”

Tom Birkin
Actuarial Consultant
XPS Pensions Group