News about pensions

Cosatu's newly elected leadership, led by general secretary Zingiswa Losi, used its reconvened 15th National Congress to call for faster talks on the next phase of the two-pot retirement reform and for tax relief for highly indebted workers. Critics argue the system offers less relief than expected because withdrawals are taxed at marginal income tax rates. The federation also pledged to strengthen its living wage campaign, defend collective bargaining, oppose retrenchments, labour broking and outsourcing, and develop a workers' cost-of-living index. It further demands greater transparency in retirement funds, better tax thresholds, and more union representation on the board of the Public Investment Corporation, where the law allows three union representatives.

According to Hargreaves Lansdown, new state pensioners under 77 could receive up to about £488 more a year, as the triple lock forecast points to a 3.9% rise from April 2027. The increase is based on average wage growth of 3.9% rather than inflation of 2.9%, with the final figure due at the Budget on October 28. A full new state pension would rise from £241.30 to £250.70 a week, and a full basic state pension from £184.90 to £192.10 a week. New Prime Minister Andy Burnham has confirmed the triple lock will stand for the rest of this Parliament, despite earlier plans to scrap it from 2030. Helen Morrissey of Hargreaves Lansdown says the rise will help but will only cover the basics, urging people to boost pension contributions.

The Social Security Administration announced a 3.6% cost-of-living adjustment (COLA) for benefits in 2027, starting in January for 72 million beneficiaries and on December 31 for Supplemental Security Income (SSI) recipients. The increase reflects inflation measured by the Consumer Price Index from the third quarter of 2025 through the third quarter of 2026, and average retirement benefits will rise by about $75 a month. The payroll tax rate stays at 6.2%, while the taxable earnings cap rises from $184,500 to $192,300. The program faces a shortfall as payments exceed tax collections, and without congressional action, benefits would automatically begin to decrease in 2032. Senate candidates in key races have so far been relatively quiet on the issue.

Social Security benefit payments will rise 3.6% in January, an adjustment based on the CPI-W index, which the article argues may not fit retirees well. Retirees are considerably older than the average American, spending less on food, housing and transportation but more on healthcare, so the CPI-E index for people aged 62 and over may better reflect their costs. Using CPI-E for 2024 would have produced a 4% raise instead of the 3.2% received, meaning $62 more per month instead of $50. The Senior Citizens League says beneficiaries have lost 13.7% of their buying power since 2016, and most proposed fixes require Congress. The article suggests retirees seek more investment income or higher-yielding savings accounts for idle cash.