Stephanie Hawthorne’s excellent article tells it like it is and the 330 comments that it’s solicited show just how much interest there is amongst pensioners in the outcomes of their “40 years of savings”.

The article talks to those who have income paid to them from state and employer schemes. It doesn’t talk to the millions of pensioners paid by annuities, only a tiny proportion of which are set up to increase in line with inflation. Infact annuitants are the most likely to be stuck on so called “level pensions” which at times like this are disastrously devalued.

This will be a bad year for those whose income is capped at 5% but a really terrible year for those on “no increase” pensions.

It hasn’t been much of a year for those in public sector pensions who have had the same increase (3.1%) in April as those getting the state pension. The increase in 2023 will be an interesting one. Judging by the noise on the Mail’s comments board, there will be outrage if this is paid at full uncapped CPI (e.g. as much as 10%).

Several comments on the Mail’s board are already hinting that the Government will find a way to manipulate the CPI number to manageable proportions as it will be hard for any Chancellor to go back on his word on the triple lock for a second year.

We should remember that up to 85,000 households largely dependent on state pensions are eligible for as much as £1.7bn pa in state assistance that is so far unclaimed.

So where does this leave those with private pension pots?

While experts ponder the technicalities of CPI, RPI , CPIH and other variants, the man and woman on the Clapham Omnibus are left with nothing much more than the 4% rule. The 4% rules is that you should divide what you have in your pension pot by 25 and pay yourself an annual income at that rate.

Which of course assumes that your investments have gone up net of charges to allow your pot to grow, But if the charges on your pot are at the levels typically levelled by the wealth management industry, that means you will have to earn 4% +2.5% = 6.5% just to stand still and to get the kind of increase needed to combat this year’s inflation, you’ll be looking at year on year growth on your pot of around 16%. Good luck!

The pension freedoms were launched at a time of low inflation and low wage growth, the cost of living was static and it remained so for the next 6 years. It was only in 2021 that people started talking of inflation and only since the events of the past six months that inflation has gone crazy.

Is this inflation increase a spike?

The Bank of England and the Office of Budget Responsibility (OBR) would like us to think it is. But this is a question that is exercising the minds of everyone – or should be.

Andrew Bailey’s insistence that big price rises would be ‘temporary’ have left him open to criticism

“The BoE persisted beyond any rational interpretation of the data to tell us that inflation was transient, then that it would peak at 5 per cent,”

Liam Fox, former cabinet minister, told MPs last week.

For the millions of savers who have no protection against cost of living increases other than the minimal increase in their state benefits, the Bank of England inflation target of 2% pa is the only lifeline they have.

The sad truth is that pensions are going to be devalued in real terms this year, the huge fees being paid by those who have their money managed by wealth managers will look increasingly vulnerable while the pressure will grow for a pot to pension solution for the non-advised that pays more than annuities and doesn’t cost an arm and a leg in advisory fees.

Above all, it is time for the financial services sector to come clean and accept that despite the obvious wins from auto-enrolment, those low earners over 60 who are looking to retire on their pension savings are going to need a whole lot more than the £62,000 which is the average lifetime retirement savings of the British worker.

Hats off to Andrew Tully of Canada Life for promoting Pension Credit for those who are 66 or over. Simply telling people to save more is of little help to those who didn’t save enough.

It is telling that of the 300+ comments that Stephanie’s article has solicited, only a tiny fraction relate to DC pension pots. When it comes to pensions, people do not think pots!

Advice from the financial services industry is totally ignored in the comments section.