UK DWP Warns State Pension Payments Could Freeze Amid Rising Costs

The UK government is considering freezing state pension payments as a pragmatic response to the rising costs driven by the Triple Lock system, which increases pensions annually by the highest of earnings growth, inflation, or a fixed rate. Experts suggest that raising the state pension age, currently set to increase to 67 next year and to 68 by 2044-2046, remains the most viable long-term option to control the pension bill. Meanwhile, in Australia, the government announced it will raise deeming rates used to assess income from financial assets for pension and welfare eligibility, ending a pandemic-era freeze that saved pensioners $1.8 billion. The lower deeming rate will increase from 0.25% to 0.75%, and the upper rate from 2.25% to 2.75%, affecting pensioners with assets above certain thresholds and thereby reducing their benefits. This change reflects a shift as inflation eases and aims to restore deeming rates closer to pre-pandemic levels. Both the UK and Australian measures reflect ongoing efforts by governments to balance pension affordability with support for retirees amid economic challenges.