No matter how much wealth you have, the State Pension can be hugely valuable in retirement.

Having access to a guaranteed monthly income that’s designed to increase in value over time in line with the rising cost of living can provide the bedrock to your later-life income. This could cover much of your monthly bills, allowing you to use the money you diligently set aside to achieve your goals.

However, although this is currently the case, changes in legislation could affect how the State Pension works – and this could have far-reaching consequences for your wealth.

Indeed, the Institute for Fiscal Studies (IFS), an independent economic research body, has recently proposed scrapping the State Pension “triple lock”, the rule that sees the amount paid increase over time, in favour of a new system.

While this is only currently a proposal, it’s important to be aware of what this change would mean for you and how it could affect your retirement income.

Read on to discover how the triple lock works, why the IFS has proposed scrapping it, and how taking financial advice can offer reassurance in times of uncertainty.

The triple lock aims to ensure that the State Pension keeps pace with the rising cost of living

As the cost of goods and services rises over time, your money’s spending power is reduced. For example, a year of inflation at 5% means goods and services that cost £1,000 a year ago would now cost £1,050.

This is why it’s important to keep inflation in mind when designing a retirement income strategy. That way, you can continue to afford your lifestyle throughout later life.

For the State Pension, the government has committed since 2011 to increasing the full amount paid each year to those who are eligible and over State Pension Age. Known as the State Pension “triple lock”, this typically sees the State Pension increased each year by one of three key economic metrics – hence “triple”.

Each year, the State Pension is supposed to increase by the highest of:


  • Inflation as measured by the Consumer Prices Index (CPI) in the year to September
  • Average earnings growth from May to July, year-on-year
  • 2.5%.


In 2023, the highest of these was earnings growth, rising by 8.5%. So, from April 2024, the full amount of State Pension will rise from £203.85 a week (£10,600 a year) to £221.20 a week (£11,500 a year).

While £11,500 might not be enough for you to reach all your goals on its own, it could certainly provide a reliable sum that you could use to pay basic bills in retirement.

Furthermore, knowing that this sum will increase in line with the cost of living over time ideally means that it will maintain its spending power, too.

Proposals involve scrapping the triple lock in favour of an earnings link

Despite how useful the triple lock appears to be, the IFS has been critical of the current arrangement. As FTAdviser reports, the institute believes that it fails to provide clarity for either pensioners or the government, as neither can be sure what the State Pension will pay over time.

Instead, the research body has proposed replacing it with an earnings link, using a “four-point pension guarantee” to offer greater certainty over how much pensioners will receive.

Firstly, the IFS has proposed that the government should set a target level for what the State Pension should be as a percentage of relative earnings – currently, this is around 30% of median full-time earnings.

Once the State Pension has reached its target level, the IFS’s suggestions involve increasing the amount paid so that it keeps pace with growth in average earnings in the long run. This is supposed to ensure that pensioners benefit when living standards rise.

Furthermore, the IFS’s suggestions state the State Pension will continue to increase at least in line with inflation every year, both before and after the target level is reached.

Finally, the last two parts of the guarantee involve ensuring that the State Pension will not be means-tested, and that the State Pension Age will only rise as longevity at older ages increases, and never by the full amount of that longevity increase.

As you can see, this would be a fairly radical overhaul of the current triple lock commitment, and could make a significant difference to the way you manage your money in future.

Suggestions like this demonstrate the importance of consistent financial advice

For now, the IFS proposals remain to be exactly that: proposals. Although the suggestions could provide certainty over the State Pension amount in future, the government may well choose to ignore them – or even design and implement an entirely new, separate system.

Either way, announcements like this show the importance of taking consistent financial advice from a professional.

The ever-changing rules and regulations can make it tricky for you to know what the best choices are for your wealth. So, working with an experienced financial planner can help you carefully navigate these, ensuring that your wealth is suitably organised, no matter what happens.

As financial planners at Cordiner Wealth, we can design a strategy for your wealth with your goals for the future at heart.

Crucially, we’ll remain in touch with you, making suggestions and recommendations for your wealth as and when things change. That way, you can be confident that you’ll be able to continue living your lifestyle, even when financial legislation is updated and the landscape shifts.

If you’d like help from an experienced financial planner to support you in making sensible decisions, please do get in touch with us at Cordiner Wealth.

Email or call 0113 262 1242 to speak to us today.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.