How inflation will hit your pension savings

Many pension schemes that offer protection from price rises may not be as good as they seem.

Piggybank
Ministers have since reinstated the promise, meaning that pension payments in 2023 will go up in line with the rate of inflation in September 2023.
(Image credit: © Getty)

Millions of pensioners with supposedly gold-plated private-pension plans are going to take a big hit from inflation.

XPS Pensions, a pensions consultant, has warned that more than four million pensioners in final-salary schemes and other plans offering guaranteed retirement benefits will not see their incomes rise in line with soaring inflation – which is currently running at 10.1% – even though their schemes ostensibly offer inflation-proofing.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.