Natalia
State pensioners on the old Basic State Pension—men born before 1951 and women before 1953—are set to miss out on a significant £550 annual increase that newer pensioners are expected to receive under the Triple Lock.
While the New State Pension will benefit from this generous uplift, older pensioners will only see a smaller increase on part of their entitlement.
What the Triple Lock Means
The Triple Lock guarantees that each year, state pensions increase by whichever is highest: average earnings growth, inflation (CPI), or 2.5%.
With earnings growth currently at approximately 4.6%, many expect a £550 increase, lifting the New State Pension to around £12,524 per year (£11,973 → £12,524).
However, those on the old system see a split: while the Basic State Pension gains the full Triple Lock rise, the additional earnings-related component (SERPS/S2P) increases only with inflation (~3.8%), meaning they don’t benefit fully from the £550 uplift.
Who Misses Out and Why
| Pension Type | Eligibility Date | Current Annual Value | New Income After Uplift | How Much Less Than New State Pension |
|---|---|---|---|---|
| New State Pension | Men born after 5 Apr 1951; women after 5 Apr 1953 | ~£11,973 | ~£12,524 (with £550 increase) | Full benefit |
| Old Basic State Pension | Men before 6 Apr 1951; women before 6 Apr 1953 | ~£9,175 (basic) + SERPS | Basic increases; SERPS rises with CPI only | £2,700+ less annually (approx.) |
Older pensioners, on average, will receive substantially less—potentially £2,700 less per year—because the earnings-related component doesn’t follow the Triple Lock uplift.
Why Older Pensioners Are Disadvantaged
The design of the Basic State Pension splits entitlement into a flat-rate basic amount and an additional earnings-related element.
In contrast, the New State Pension consolidates all entitlements under one flat rate eligible for full Triple Lock treatment. This structural discrepancy leads to a two-tier system, where older pensioners on legacy schemes don’t benefit equally.
Impacts & Broader Concerns
- Millions affected: It’s estimated that 7 million pensioners on the old system will feel the shortfall because their additional pension grows only with inflation.
- Tax implications: The new pension is edging closer to the £12,570 income tax threshold, possibly pushing more pensioners into paying tax due to the frozen allowance.
- Equity questions: Critics argue the split in pension uprating creates unfair outcomes across pensioner cohorts.
While the Triple Lock promises a significant uplift—around £550 annually—for many state pensioners, those on the old Basic State Pension (born before 1953) are inadvertently sidelined. Due to the structural split in their pension entitlements, the earnings-related component only receives a modest inflation-based rise.
This growing two-tier system means older pensioners will see far less benefit, raising important questions about fairness, pension policy design, and the need for a more unified approach.
FAQs
Because their state pension comprises a Basic State Pension (which gets the Triple Lock rise) and an additional earnings-related part (SERPS/S2P). Only the basic part benefits fully; the extra part only increases with inflation.
Older pensioners may receive around £2,700 less per year, as they miss out on full uplift for the earnings-related portion.
The higher amounts from the New Pension may push some into paying income tax, while older pensioners may remain just below thresholds—but both groups face pressure due to frozen tax allowances.