Nearly seven million pensioners in the UK are set to miss out on the full ‘triple lock’ uplift to their state pensions this year, a discrepancy that could have real-life impacts on household budgets.
The triple lock, introduced to protect retirees, guarantees that pensions increase annually by the highest of inflation, average wages, or 2.5%.
For new state pensioners—those who retired after 2016—the boost this year is expected to be around 5%, lifting the annual pension to approximately £12,572.
However, pensioners on the old state pension system, who also receive the earnings-related SERPS (State Earnings-Related Pension Scheme), will see only the inflation-linked increase (around 3.8%) on that portion.
This means their overall pension rises more slowly than those on the newer system.
Real-Life Impact:
For retirees like Margaret, 79, from Manchester, the difference is tangible. “I was expecting a boost to help with rising energy bills, but the smaller increase means I’ll have to cut back on essentials,” she said.
Breaking Down the Numbers:
| Pension Type | Increase Applied | Approx. Annual Pension (after increase) |
|---|---|---|
| New State Pension | Full triple lock (~5%) | ~£12,572 |
| Old Basic State Pension | Full triple lock (~5%) | ~£9,634 |
| SERPS (Earnings‑related part) | Inflation only (~3.8%) | Lower uplift vs. new pension |
This gap leaves older pensioners hundreds of pounds behind, and experts warn it could exacerbate financial pressures for those already living on tight budgets.
Policy Debate:
Economists say the current system creates inequality between old and new pensioners. “The earnings-related portion should ideally be adjusted with wage growth to truly protect retirees’ living standards,” says Dr. James Thornton, pension analyst.
Moreover, the boost could trigger income tax for some pensioners, as the new state pension edges close to the £12,570 tax-free threshold, a nuance often overlooked in public discussions.
What Pensioners Can Do:
-
Check eligibility for pension credit or other benefits
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Review personal finances and plan for energy and health costs
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Seek guidance on tax implications of pension increases
Unless policy reforms are introduced, the discrepancy between new and old pensioners will continue, leaving millions potentially struggling to keep up with rising costs.
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