Over-50s group Saga brushed off the threat to the triple lock as it cashed in on booming demand for cruises, holidays and travel insurance from its wealthy customers.

Chief executive Mike Hazell said that his customers ‘tend to be less reliant on the state pension’, following the Prime Minister’s announcement that the triple lock will change to a double lock from April 2030.

Despite worries over household costs, Hazell said his affluent customer base were ‘economically resilient’ and viewed their holidays as a ‘priority’. 

It came as Saga shares soared 21 per cent on Wednesday after the group lifted its annual profit guidance and said it would achieve its medium-term targets sooner than expected.

The FTSE 250 group expects annual profit before tax in a range of between £65million to £70million for the year to the end of January 2027, compared to £44.2million last year.

And Hazell said the group was ‘significantly ahead’ of a target to achieve annual profits of £100million by January 2030.

Cruises, taking passengers through destinations including the Mediterranean and the Norwegian Fjords, have proved popular.

The business is also hoping to reap the rewards of new UK holidays that offer customers stays in university accommodation and explore historic cities including Canterbury and Chichester.

The business saw profits nearly double to £46.6million for the six months to July 31, as revenues jumped 12 per cent to £367.5million.

And boss Hazell said he was unbothered by Andy Burnham’s recently announced triple lock changes. 

It means the state pension will increase either by the rate of inflation or a minimum of 2.5 per cent, axing the explicit link to wage growth by 2030. Burnham said the state pension will 'hold its value relative to earnings over time'. 

Hazell said: ‘For our customer base, it is worth recognising that Saga customers tend to be less reliant on the state pension, they tend to be more affluent in that age group. So we are not seeing [Burnham's announcement] to be a major consideration.’

He described his customer base as ‘economically resilient’ and said that travel – the group’s largest driver of profits – was ‘not a discretionary spend for Saga customers, it's something they prioritise.’

The bullish update comes after the company has been pressing ahead with a turnaround that has seen it exit its insurance underwriting through the sale of Acromas Insurance Company to Ageas.This simplification of the business has enabled it to focus on new options, such as a new pet insurance offering, Hazell said.

He also said the ‘smart technology’ of its cruise ships had helped the business navigate the impact of extreme weather, including low river water levels on the Rhine and the Danube.

Despite these low river water levels and disruption caused by the Middle East, profits for the second half are expected to match the same period last year. 

Mark Crouch, market analyst at investment platform Etoro, said: ‘Saga is making its old reputation for debt and complexity look increasingly out of date. Profits have almost doubled, cash generation is strengthening and borrowings are falling faster than expected, giving substance to a turnaround investors have already backed enthusiastically. After a remarkable run in the shares over the past year, expectations are no longer on the floor.

‘Despite booming cruise demand, Saga’s turnaround has hardly been plain sailing. The clever part has been simplifying the business while preserving what makes it valuable, a loyal over-50s customer base whose appetite for cruises and holidays shows considerable spending power even against a difficult economic backdrop.’

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