Eight million state pensioners face missing out on up to £575 in their bank accounts by the end of the financial year because they are not receiving the full Triple Lock increase.
The Department for Work and Pensions (DWP) recently announced upratings for the New and Basic State Pensions in line with the government’s commitment to the Triple Lock, which guarantees annual increases based on the highest of inflation, average wage growth, or a 2.5% minimum.
This year, while the New State Pension is set to rise by £575, the Basic State Pension will increase by a lower amount—around £440 over the 52-week year. Analysis reveals that fewer than two in five pensioners received the full 4.8% uplift tied to average earnings growth, meaning 8.2 million pensioners benefit from a smaller increase.
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The Triple Lock applies only to the core state pension linked to National Insurance contributions. However, many older retirees—those who reached pension age before 2016—receive payments made up of two components: the basic state pension and an earnings-related addition. The latter does not increase in line with wage growth, resulting in a reduced overall uplift for this group.
Baroness Ros Altmann, former pensions minister, criticized the system, stating: “The triple lock is a bit of a con trick. Older pensioners don’t benefit nearly as much from the triple lock as younger ones. The poorest and eldest are less protected than the youngest and better off. We need a proper review.”
Steve Webb, also a former pensions minister and now partner at consultancy Lane Clark and Peacock, acknowledged the limitations but emphasized that “while the additional state pension isn’t increasing in line with wages, the overall old state pensions is still rising faster than inflation.”
This disparity highlights ongoing challenges in pension policy and calls for reassessment to ensure fairer outcomes for all retirees.