STATE PENSION PREDICTED TO RISE AS THE COVID-19 OUTBREAK PUTS THE TREASURY IN TIGHT POSITIONS

Keeping to their promise in the Conservative manifesto which is for a tenured duration of five years of the parliament, the government makes use of a system referred to as the triple lock in the computing and payment of the state pension.
The triple lock which consists of the Consumer Price Index measure of inflation, the rising average wage or two and half percent portray the rising cost of living. Currently, the state pension increases annually at the same level with the increasing cost of living shown by the triple lock.
The government however could be dealing with a large increase in the state pension if they stick to the triple lock system. The wages paid by the state due to the coronavirus pandemic technically causes a rise in cost of living which translates to increased state pension.
THE TRIPLE LOCK
Since April, the new state pension has added up to one hundred and seventy five pounds weekly. The prior state pension which is one hundred and thirty four pounds weekly is still paid to most pensioners. There is a possibility these pensioners may get a credit increase.
The recent and old pensions paid by the state both increased to almost four percent.
This increase was as a result of the increase in the average earnings which is one of the factors in the triple lock. The average earnings was higher than the CPI inflation and the two and a half percent. This data was culled from the government’s official data between May to July.
As the year concludes, the government stipulates the amount of state pension that will be paid in the new-year starting from next April.
THE DEBATE AROUND THE TRIPLE LOCK
For the past decade, the triple lock has been used to decide the amount of state-paid pension.
The triple lock system was birthed by an alliance between the Conservatives and Liberals. The alliance was to make certain that the pensioners did not have too little pension to match their increasing cost of living.
Apparently, it is a policy that is exorbitant.
The policy has become the source of a debate since its introduction. It has torn people into two points of views with economists arguing against the triple lock since it sees the pensioners earning more yearly than the active younger workers since the financial crisis. They consider this to be unfair.
On the other side of the divide, charities that stand for the pensioners are of the opinion that the pension is still a little amount for the elderlies to survive on and it is comparatively small on the international scale.
HOW THE PANDEMIC AFFECTS THE TRIPLE LOCK POLICY
The coronavirus pandemic has put more pressure on the government financially. The government has to support citizens as they are not working and earning.
Average earning is bound to increase when people start working again and they begin to earn full incomes again. This would mean that according to the triple lock state pension would have to increase by eighteen percent which is the expected increase of average earnings.
It is expected that the debates will linger and maybe the authorities will re-evaluate the triple lock policy.

Not in the last century have we experienced anything remotely close to the Covid-19 crisis. What began as a health crisis now appears to be a full-blown economic catastrophe. As the first wave of the virus passes, we have to start looking at some of the economic impacts this crisis will have in Scotland.
We already know that everyone will be affected in one way or the other; what we do not know, however, is how much it will affect each individual.
First of all, families across Scotland are experiencing financial insecurity. People’s health are threatened while going to work has become difficult. Freelancers, self-employed people, and those reliant on statutory sick pay are affected as well. People are losing their jobs, having their work hours reduced, and feeling the heat already.
According to a recent survey by Standard Life Foundation, one out of every two UK households are worried about their finances. With huge parts of the economy being decimated, their worries are justified.
The UK government’s Jobs Retention Scheme offered encouragement last month when it paid 80 percent of wages across different industries. With payment also coming this month, employers and families under pressure have been able to breathe easy for a while.
Inside 48 hours of the scheme opening, employers made 2.2 million applications, while the total number of employees enjoying the scheme is bound to reach 8 million within the month. There are fears of a significant drop in earnings for 40% of applicants if numbers continue to rise.

Increased furlough and unemployment in Scotland
It is anticipated that over the next few months, an estimated 750,000 employees in Scotland will be enrolled on the Jobs Retention Scheme, while at least 150,000 jobs are anticipated to be lost. These numbers are not expected to be even across Scotland since different sectors face varying prospects. It is expected that Scotland’s lowest-paying sectors suffer the most.
In the retail and wholesale sector, an estimated 31,500 jobs should be lost, with 142,000 workers put on furlough. In the food and accommodation sector, an estimated 31,000 jobs should be lost, with 140,000 workers put on furlough. In the healthcare sector, however, no job losses are anticipated, with an estimated 14,000 jobs to be created.
The hospitality and tourism sector is not spared. At least 8 out of 10 employees are expected to lose their jobs or enter furlough. For workers in this sector, as well as of those in the food and accommodation services, a 20 percent pay cut will be gruesome.
Employees in the retail sector are at relative risk, even though their jobs are not secure. One out of two employees is still expected to be affected by job loss or furlough. While, the insurance and finance sectors, where employees are paid higher appear to be well insulated from the economic fall-out of the coronavirus.
What these statistics simply show, is that workers in Scotland and the UK at large with higher earnings and greater security will not suffer as much as those in the lower-paying sectors.

Financial security going into the crisis
According to statistics, one in three workers in the hospitality and tourism sector said they were under immense financial pressure; for workers in the construction sector, it is nearly one in three.
Individuals that are already struggling with financial insecurity with the ongoing crisis dread the possibilities of having their earnings cut or losing their jobs. With the rising costs of energy and food bills and an increased risk of illness adding a strain on families, the mounting pressure on workers is understandable.

The aftermath of the impending furloughs
There is a growing fear that after the withdrawal of the emergency support, and the end of all furlough schemes, a huge number of workers experiencing furlough may be redundant. This means that a mini crisis in household finances is brewing.
How the UK and Scottish government handles this crisis will be of particular interest going forward, even as it threatens to blow over.
The dream will be to see significant support continue to protect sectors and households across Scotland from extreme hardship and financial insecurity when the emergency support ends.
The general belief is that, before the crisis, the UK government erred when they pushed the risk onto those who could least bear it. The consequences have been exposed by the crisis. With focus turning towards the economic burden of the crisis, pressure has to be put on the UK government, for the provision of adequate safety measures.
The recent doubling of the Scottish Welfare Fund is a welcome sign, while inside the coming weeks, Westminster and Holyrood government will need to make fast decisions to strengthen financial security to prevent some of the UK and Scotland’s households entering into depression.

Firms have to tackle skills shortage by looking into hiring policies and consider flexible working. Jenson Fisher are encouraged leaders in the accountancy industry to use the possible recovery from the recent pandemic as an opportunity to resolve overdue issues in the industry.

Before the impact of the coronavirus on the economy, the fact newly qualified practitioners were able to earn more than the £40,000 average salary for the first time proved that accountants in Scotland were becoming scarce. This is not withstanding the fact experienced operators took home six-figure salaries.

Jenson Fisher issued a warning in its April newsletter, saying that underlying issues were bound to hit the accountancy industry. The article pointed out the potential of these underlying issues intensifying over the coming months as a result of the fallout and trauma caused by the pandemic.

A lack of succession planning, is one of the underlying issues highlighted, with possibilities of a lack of middle management, which could result from swinging cuts to graduate placement opportunities relating to the 2008 recession.

The outbreak is devastating so many businesses and livelihoods and we hope we can all get through this in the healthiest possible position. That said, accountants in Scotland, on the whole, should find themselves in a better position than many trades. It's hard to think there won't still be excess demand for roles, such was the prevailing shortfall.

We hope that firms also think thoroughly before cutting either middle management or graduate schemes off the back of the impending downturn, as happened throughout the last recession, which has now filtered through today with the reduced pipeline of clear future leaders. It is important that we attract more accountancy and finance professionals into the sector for the future of this essential industry.

Prior to the coronavirus outbreak, firms talked a lot about their commitment to flexible working and being willing and able to cater for a modern workforce, but there is much evidence to suggest this wasn’t actually being actioned.
Was this a staff trust issue, or resistance to change from a ‘old school’ work ethic, maybe, but now organisations have been forced to have our entire workforces work from home and recognise that the outputs did not drop, technology is available to manage staff and workflow and it is potentially extremely cost effect.

The questions are, will this be reflected in major changes to workplace culture once we have the ability to safely return to office environments? Will we even rush back to our offices at all?

So many practitioners are also juggling childcare and home-schooling and childcare to meet the needs to work at different hours. More than ever before, workplaces are going to have to prove to many seeking a career move that they can be an attractive, flexible employer able to cater those wishing to work from home.

Another trend that was seen was the number of candidates ready to move to smaller companies. We expect to see a large amount of restructuring, redundancies, mergers and acquisitions which has meant that big organisations have lost some of their attraction. They were always seen as a safe bet, able to offer a clear path to progression, however, there has been an interest in start-ups, fintech and the opportunity to be more entrepreneurial. It'll be interesting to see whether this trend increases or abates following the Covid-19 fallout.