Fresh figures show wage growth, at 4.1 per cent, is currently outstripping inflation at 2.9 per cent, meaning it will likely be the metric used to determine the state pension increase under the triple lock. Prime Minister Andy Burnham confirmed he would keep the triple lock during his premiership, but four groups will miss out on the boost, according to experts including former Liberal Democrats pensions minister Sir Steve Webb.
Wage Growth Triggers £515 Boost for New Pensioners
If wage growth is the metric used, the new state pension will increase by £500 a year, to £13,048. This would hand newer state pensioners a £515 boost. However, not everybody will get this cash, it has been warned, due to the Department for Work and Pensions (DWP) system. Meanwhile, those who receive the old state pension could see their payments rise from £9,615 to £10,010 a year, an increase of just under £400.
Mr Burnham confirmed his commitment to the triple lock during a Reddit AMA ahead of succeeding Sir Keir Starmer as Prime Minister, saying he would keep it. While the pledge from Labour Party Prime Minister Mr Burnham is welcome, some retirees will have to go without.
Four Groups Excluded from the Increase
Sir Steve Webb warned that the triple lock pledge applies only to the headline rate of the new state pension and the old basic pension. “Your overall increase will depend on how much of your pension comes from the element that is covered by the triple lock promise,” Webb explained.
People on the old state pension – The old state pension is paid to people who reached the state pension age before April 6, 2016, and is currently worth £184.90 a week. It means basic state pensioners get hundreds of pounds a month less than newer claimants.
Over-80 pension and other frozen rates – People on the over-80 pension, which is 25p a week, will not see a boost either. The sum has not increased since it was introduced in 1971, so it will not benefit from the triple lock. The £10 Christmas Bonus is also frozen at a tenner, while the Warm Home Discount and Winter Fuel Payment, worth up to £150 and £300 respectively, will stay the same sum too.
State pensioners living abroad – The UK State Pension is payable overseas but is only uprated annually if the individual is resident in an EEA country or one with which the UK has a reciprocal social security agreement requiring this. UK pensioners in other countries – most notably Australia, Canada, New Zealand and South Africa – have their pension frozen, meaning it is paid at the same rate as it was when they first became entitled, or the date they left the UK if they were already pensioners then.
State pensioners who have deferred – The triple lock does not apply to any money received by deciding to delay the date you claim your state pension. Instead, the money from deferring increases by CPI each year, which is likely to be a much lower rate than the triple lock this year.
