DWP Triple Lock £11,974 per Year: Many state pensioners will see a much smaller increase in their income this April, as parts of their pension won’t keep up with inflation. This issue stems from complex pension rules that successive governments have failed to fix, and there’s no indication that Labour will address it either.
Understanding the State Pension System
The UK state pension consists of multiple elements, but the triple lock guarantee doesn’t apply to all of them.
- The new state pension (for those retiring after April 6, 2016) is fully protected by the triple lock. This ensures that it rises annually by the highest of:
- Inflation
- Earnings growth
- 2.5%
- The basic state pension (for those who retired before April 2016) also benefits from the triple lock, but some additional elements don’t.
How Much Will State Pensions Increase in April?
- New State Pension (4.4 million claimants)
- Currently: £11,502 per year
- April increase: 4.1% (earnings growth)
- New amount: £11,974 per year
- Basic State Pension (8.6 million older pensioners)
- Currently: £8,814 per year
- April increase: 4.1%
- New amount: £9,175 per year
The Two Key Problems
- The Gap Between the Two Pensions is Growing
- Since both pensions rise by the same percentage, but the new state pension starts from a higher base, the gap widens every year.
- In April, the new state pension will be £2,799 higher than the basic state pension.
- Additional State Pension Increases Are Lower
- Older pensioners may receive additional state pension elements, such as:
- State Earnings-Related Pension Scheme (Serps)
- State Second Pension (S2P)
- Graduated Pension
- Protected Payment
- These elements only increase by inflation (1.7% in September 2023), not by the higher 4.1% earnings growth used for the triple lock.
- Older pensioners may receive additional state pension elements, such as:
Why This Matters
- Men who built up Serps and S2P while working will receive more in total, even with a lower percentage increase.
- Women, who typically accrued less additional state pension, will struggle more, as they often had career breaks to raise families or care for loved ones.
- Inflation is expected to hit 3.7% by summer 2024, meaning parts of the state pension will shrink in real terms.
Expert Opinions
- Stephen Lowe (Just Group) criticized the system, calling it “impossible to understand” and pointing out that it worsens the divide between old and new state pensions.
- Andrew Tully (Nucleus Financial) warned that many pensioners will feel worse off, especially if they’ve also lost the Winter Fuel Payment.
What’s the Long-Term Outlook?
The gap between the new and basic state pension will keep widening until everyone is on the new state pension system by the 2040s. Until then, millions of older pensioners will feel short-changed, as their income falls behind rising living costs.
FAQ’s
Why are some state pensioners getting a smaller increase?
Some elements of the state pension, such as Serps and S2P, only rise with inflation (1.7%) rather than the triple lock (4.1%), leading to a lower overall increase.
How much will the state pension increase in April 2024?
The new state pension will rise from £11,502 to £11,974 (4.1%), while the basic state pension will increase from £8,814 to £9,175 (4.1%).
Why is the gap between the new and basic state pension widening?
Both pensions rise by the same percentage, but since the new state pension starts from a higher amount, its cash increase is larger, widening the gap each year.
Does the triple lock apply to all state pension elements?
No. While the main state pension benefits from the triple lock, additional elements like Serps, S2P, Graduated Pension, and Protected Payment only rise with inflation.
Will the government fix the state pension inequality?
There’s no sign that the government or Labour plans to change the system, meaning older pensioners will continue to see their pension increase at a slower rate.
