Industry experts have warned that pensioners could face financial strain in light of the news that inflation is expected to remain elevated across 2022 and 2023, with the Chancellor’s Budget forecasting further increases in inflation rates to 4 per cent.

Industry experts have previously raised concerns that pensioners could face a 'squeeze' on living standards if inflation was to continue rising, after it was confirmed that the state pension would rise by 3.1 per cent in April, due to the suspension of the triple lock.

Interactive investor head of pensions and savings, Becky O’Connor, warned that the inflation forecast in today's Budget will “spook everyone already worried about rising living costs”, and will be “especially scary” for pensioners looking to cover essentials from their limited income or anyone trying to make their pension pot last in retirement.

O’Connor also noted that price rises negatively affect workers investing for retirement and trying to achieve returns that beat inflation to ensure they eventually have enough in their pension pot.

She continued: “Inflation at a level of 4 per cent becomes hard to beat even when investing in the stock market, so long term investors will have to box clever to beat it. Some may feel they are being pushed out of their risk comfort zone in order to do so.

“The additional prospect of an imminent rise in interest rates, hinted at by the Chancellor as he referenced the Bank of England’s duty to control inflation, will be scant comfort, as savings rates remain so far behind inflation that any rise would make little difference to the appeal of keeping money in cash savings.”

These concerns were shared by Quilter retirement planning expert, Ian Browne, who warned that the Budget will have left “many pensioner’s feeling forgotten about at a time when their finances continue to be squeezed”.

In particular, Browne suggested that the government’s refusal to increase any of the social security payments for pensioners such as the winter fuel payment, cold weather payment, or the warm homes discount will have been a “huge blow to millions across the UK”.

"This will further add to pensioner’s anger at the government after it downgraded the triple lock causing them to miss out on a potential 8 per cent increase in state pension payments,” he continued.

“We are in a fiscally difficult time and it's clear the government needs to tighten its belt in some areas, but these social security payments continue to help the elderly keep warm and get through the winter months.”

In addition to this, Aegon pensions director, Steven Cameron, has raised concerns over the prospect that higher inflation could further reduce the real value of the pension lifetime allowance, which was frozen at £1,073,100 at the last Budget until 2026.

Cameron said that it is "imperative" that the freeze isn't allowed to continue indefinitely, arguing that inflation increases are making the "punishment" greater and more wide-reaching.

He explained: “Our analysis highlights how with good investment returns, many people who are likely to consider themselves a long way from the cap at present could be caught out.

"For example, a 6 per cent investment return over the next nine years would take someone with £686,000 today over the limit, even if they do not contribute a penny more to their savings.

"Similarly, at a more modest growth rate of 4 per cent someone with £882,000 will breach the limit within 5 years. The lifetime allowance is effectively punishing those who have done the right thing and saved regularly over the course of their lives.

"With inflation on the rise, that punishment is greater and more wide-reaching, making it an area that requires reform in the years ahead.”

The Chancellor has also announced a rise in the minimum wage in the Budget, which some have suggested may help address concerns over increasing living costs, as well as potentially helping to boost auto-enrolment pensions.

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