SEVEN MILLION PENSIONERS TO MISS OUT ON TRIPLE LOCK UPLIFT
Nearly seven million retirees will be frozen out of the full state pension uplift in April, analysis suggests.
The “triple lock” ensures that the state pension rises each year by the highest of inflation, wage growth or 2.5pc.
The latest figures show wage growth running at 4.6pc, which would boost the full “new” state pension by £551 to £12,524 a year in April. Around 8.4 million retirees on the “old” state pension would also see their annual earnings rise to £9,634.
However, 6.9 million of these older retirees also draw money from an additional earnings related pension, commonly known as Serps, which only rises by inflation every year.
As the latest inflation figure for July is 3.8pc, these older pensioners are likely to only get around 80pc of the uplift for the earnings related element of their pension.
It means older pensioners could miss out on hundreds of pounds a year compared to their younger counterparts.
Annual triple lock rises are based on the previous September’s inflation figure and average wage growth in May to July, meaning the amount of next year’s increase will be known in October.
Experts have warned of a “hidden layer” of pensioner poverty despite the rising cost of the state pension.
The Office for Budget Responsibility (OBR) said that rising life expectancy and the triple lock could push the cost to £200bn by 2073.
The state pension age is already set to rise from 66 to 67 by 2028, and to 68 by 2046.
Jack Carmichael, of consultants Barnett Waddingham, warned that the rising cost could mean workers being forced to wait until 80 to draw their state pension, or pay 50pc more in National Insurance contributions by the 2070s.
Steve Webb, a former pensions minister, now a partner at pension consultants LCP, said: “It often comes as a surprise to people that the different elements of their state pension can rise by different amounts each year.
“The additional state pension, often called Serps, has always been linked to inflation, whereas the old basic state pension has benefited from a more generous formula since 2011.
“Next April, the additional state pension will simply be linked to inflation as usual, but the basic pension will rise by the higher of inflation or wages growth – and until October, we will not know for sure which will be the key number.”
Becky O’Connor, of PensionsBee, said: “It’s tempting to fall into the trap of thinking all older people are going to benefit disproportionately from state pension increases compared to working people.
“But the state pension system is complicated, and in fact, millions of older people do not get the increases and this falls below the radar.
“There is a hidden layer of pension poverty, and the majority of pensioners who rely on basic state pension are susceptible to. Headline increases to the new state pension hide the reality for millions.”
The Treasury was approached for comment.
2025-09-03T10:15:39Z