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What is the state pension triple lock?

Archive for December, 2022

What is the state pension triple lock?

Wednesday, December 14th, 2022

The Chancellor’s decision to protect the state pension triple lock was one of the most
headline-grabbing aspects of the recent Budget.

But what exactly is the triple lock and what does it mean? In short, it’s a mechanism designed to make sure the state pension doesn’t lose value, so it will go up by whichever is highest of the following measures:

Average earnings
The rate of inflation (as per the Consumer Price Index)
2.5 per cent

So if, for example, average earnings went up by three per cent, the state pension would go
up this amount, provided the rate of inflation was also lower than this amount. Or if average earnings went up by two per cent and inflation increased by three per cent in the same year, the state pension would go up by the latter amount.

The Chancellor’s pledge to protect the state pension triple lock was therefore very
significant in light of the current cost of living crisis and inflation being at a 40-year high.
With this guarantee in place, pensioners are in a stronger position to withstand the tough
economic climate and make ends meet at a time when so many people are really feeling
the pinch.

However, it should be noted that Jeremy Hunt didn’t commit to saying how long the
measure would remain in place.

This is a costly policy for the government at a time when it wants to spend public money
more efficiently and bring down public debt. So there’s every chance we could again be
asking about the future of the triple lock before the end of the next financial year.
We should also stress that the full state pension is currently £185.15 per week, which works
out to less than £10,000 a year.

So even though it’s due to rise by £870 in April 2023, that’s still far from being enough
money to live off, let alone enjoy the quality of life that you aspire to during your

That’s why you should make sure you have plans in place to supplement the state pension,
such as workplace pensions, private pensions and other investments, and ensure that
these represent the bulk of your income.

Then you can set yourself up to enjoy a much more comfortable lifestyle during your
retirement, having the means to live the kind of life that you want and deserve.
If you have any questions about saving for retirement and making the most of your
pensions, we’re here to help and will be happy to speak with you.

Get in touch and take charge of your retirement planning today.

Why it’s important to have a will

Wednesday, December 14th, 2022

If you haven’t got a will, you don’t have control over what happens to your money and assets after you die.

That means your wealth won’t go to your chosen beneficiaries, and could cause lots of lengthy and costly legal issues for the loved ones you leave behind.

Here are our top reasons why you should make sure you have a legally binding will in place.

Put yourself in control

If you die without a valid will, strict inheritance laws, known as the Rules of Intestacy, will apply.

These state that once any tax and debts have been paid, the first £250,000 of what remains, your personal possessions and half of any outstanding wealth will go to your spouse or civil partner, with the rest going to your children once they’ve turned 18.

It’s important to have a will because these rules might not necessarily reflect what you actually want to happen to your money when you die.

Make sure you can leave money to your partner

While the Rules of Intestacy enable a share of your money to go to your spouse or civil partner, there is no provision for unmarried partners. So if you’re living with your partner but not married, they won’t inherit a penny or have any legal claim to your estate, even if you’ve been together for many years and have children together.

Having a legally valid will in place is the only way to guarantee that you can leave money to your partner if you haven’t yet tied the knot.

Reflect your changing circumstances

As time passes, your circumstances can change dramatically. Perhaps you’ve got married, had children, or got divorced, or maybe you’ve bought a property or invested in a business.

You can update your will throughout your life, so it accurately reflects your current situation at any given time.

Make childcare provision

A will allows you to nominate a guardian for your children if you and your partner die. Otherwise, a Court will have to make this decision.

Reduce your tax liability

By writing a will, you can make sure you’re not paying more than you need to in inheritance tax.

Help your loved ones avoid complicated legal processes

If you write a will, you can choose who you want to handle your estate. Otherwise, a Court will have to decide, and this can not only be costly and time-consuming for your loved ones, but also extremely upsetting and could lead to family disputes.

By being clear about your wishes and who is responsible for making key decisions, you’re much more likely to avoid causing any unnecessary friction at a time when feelings might already be running high.

State your funeral wishes

If you have particular wishes for your funeral, such as where you want it to be, whether you want to be buried or cremated and what readings you’d like at the service, a will is a good place to make this known.

Again, it makes it easier for your family and loved ones at a distressing time.

Leave money to a good cause

You can use your will to leave a share of your estate to a charity or cause that is important to you.

Get peace of mind

Ultimately, having a will in place means you can be sure your wealth will go to your chosen recipients and be distributed in line with your wishes.

That can give you great confidence and peace of mind, as you know you’re not leaving anything to chance.

For advice on writing a will and planning your finances to make the most of your inheritance, please get in touch with us, and we’ll be happy to speak with you.