Older state pensioners missing out on £550 DWP increase

A huge state pension triple lock boost set to be handed to retirees is not going to be given to older state pensioners who retired before 2016.

Thanks to the complex web of pension rules in the UK, the triple lock boost given to state pensioners who are on the old, basic state pension will not be as lucrative as it is for new state pensioners.

Everyone who reached state pension age after April 2016 is due for a state pension boost, currently set to be as much as £550 a year next April. That's because the Triple Lock forecasts show that right now, the benefit is set to increase by 4.6% next year.

The new state pension was introduced in 2016 and applies to all men born after April 5, 1951 and women born after April 5, 1953. Everyone who gets the State Pension will be handed another £550 a year thanks to the Triple Lock, according to the latest figures.

The DWP has to up the amount paid to those who receive the state pension each year thanks to the 'Triple Lock' system, which enshrines in law that everyone who is eligible for the handout from the Department of Work and Pensions must see an increase each year, either level with inflation, wage growth or by 2.5%, whichever is highest.

And the latest Consumer Price Index figures for April to June - suggest that it could be a handy 4.6% increase for pensioners per year if the same wage growth holds up.

The CPI's latest figures, released by the ONS this month, state: "Annual growth in employees' average earnings was 5.0% for regular earnings (excluding bonuses) and 4.6% for total earnings (including bonuses).

If the same wage growth figures were maintained until September, when the Triple Lock calculation is carried out, it means pensioners would be given a 4.6% boost to their pensions next year.

Aaron Peake, personal finance expert at CredAbility, explained: "Right now, earnings growth is slightly ahead of inflation, so that's the frontrunner for determining the rise in 2026.

"If we take current wage growth figures...that's the ballpark for next year's state pension increase."

Right now, the full state pension is set at £11,973 per year, so a 4.6% increase would add £550.76 per year to pensions, taking the weekly payments from their current £230.25 per week to about £240.84 per week, or £12,523.76 per year in total.

But for older state pensioners, the same 4.6% increase won't equal as much money. The older state pension, in its basic form, is worth £176.45 per week. Boosted by 4.6%, that would make the new amount just £8.12 higher, at about £184.57 per week. Multiplied across the year, that's £9,597.64, or about £2,745.36 less than new state pensioners.

Of course, the triple lock will be calculated for 2026 based on May to July wage growth and inflation, so it's possible it could still change. But it's guaranteed that the old state pension will lag behind the new state pension thanks to the different baseline amounts.

Older state pensioners with no other income can claim Pension Credit, which boosts their income to almost the same level as the full new state pension. Pension Credit currently tops up state pension income to £227.10 per week, just a few pounds short of the full new pension, and will also increase with the triple lock. It means that Pension Credit, if it also increased 4.6%, would increase by £10.44 up to £237.54.

But you won't be eligible to claim Pension Credit if you have other income, such as salary or savings, that takes you over the income threshold, which means you won't get as much as those on the full new state pension, even if those pensioners have the same savings and income as you.