Not every pensioner receives an annual increase in their state pension in accordance with the triple lock
We clarify who is left out.
In addition to missing out on the 4 percent increase next month, hundreds of thousands of retirees do not have their state pension payments increased with the triple lock.
Due to the triple lock, the full new state pension will rise to 230.30 per week (11,975 annually) on April 6, 2025. The basic state pension, also referred to as the "old" state pension, will also increase by 4.1 percent in the meantime, bringing the total yearly amount to 9,175.
State pensions will be increased annually by inflation, wage growth, or 2 percent, whichever is higher, according to the triple lock.
However, because of their living arrangements or the kind of pension they receive, many retirees will not be able to take advantage of this increase in income.
Nearly half a million retirees receive "frozen" state pensions, which are never increased, while thousands of others receive government payments that are only increased in line with inflation.
We clarify who is not eligible for the triple lock on state pensions.
1. Foreign-born retirees in specific nations
The triple lock does not increase the state pensions of British pensioners residing overseas in nations like Australia, Canada, India, New Zealand, and South Africa.
End Frozen Pensions estimates that approximately 450,000 pensioners are impacted by this "frozen state pension" policy. According to the advocacy group, the policy is "injustice" and people who relocate to "frozen" nations "should not have to face financial hardship in their retirement."
The marketing director of the insurance company William Russell, William Cooper, says: "Expat pensioners can receive the UK state pension no matter where they reside, but it's important to know how living overseas may impact the amount and any potential increases.
"Your state pension may still rise annually if you live in a certain country, usually one that has a reciprocal social security agreement with the UK. In other nations, the pension might be "frozen" at the initial payment rate.
Annual increases in the state pension are granted to British citizens who relocate to nations in the European Economic Area, such as Switzerland, the United States, or Jamaica.
AJ Bell's public policy director, Tom Selby, observes that the "frozen state pension" policy "has been maintained by successive governments and is unlikely to change." He goes on to say that the lack of the triple lock "could have a massive impact on retirement income" if you retire to a place like Australia or Canada.
An average UK state pension recipient who retired overseas to a "frozen country" only received 2,946 annually, according to research conducted last year by the investment platform Interactive Investor. This is in contrast to 10,099 for a UK pensioner.
The number of signatures on a petition to lift "frozen pensions" has exceeded 173,000.
2. People who receive additional state pensions
Only the new and old basic state pensions are covered by the triple lock pledge.
This implies that some of your state pension may not be protected by the triple lock if you reached state pension age prior to April 2016. This is due to the possibility that you receive additional state pension, which is a sum of money paid in addition to your basic state pension.
Sarah Pennells, a consumer finance specialist at Royal London, clarifies: "The triple lock only affects the core portion of the state pension. You may be eligible for any additional state pensions, such as the state second pension or SERPS, which only increase in response to inflation as determined by the Consumer Price Index (or CPI).
Men born before April 6, 1951, and women born before April 6, 1953, may be eligible for additional state pensions. It may also be inherited from your spouse.
According to Pennells, some individuals may find that the additional state pension makes up a sizable portion of their state pension income. Their pension will increase annually, but the state second pension component, or SERPS, will only increase in line with inflation rather than the highest rate of inflation (as determined by the CPI), earnings growth, or 2.5 percent.
3. Those who postpone receiving their state pension
Deferring their state pension is the third category of individuals who do not benefit from the triple lock on their entire state pension.
Pennells remarks, "The triple lock does not apply to any additional money you receive by deferring - but it does apply to the standard state pension amount if you choose to delay (or "defer" as it is sometimes called) your state pension instead of taking it when you are entitled to.
If, on or after April 6, 2016, you reached or will reach state pension age, your state pension will increase by 5 percent for each full year you postpone taking it.
For those who do not require the income right awaypossibly because they are still employed or have other sources of incomedeferring can be a wise choice. How long you live in retirement may determine whether the 58% increase for each year you postpone makes financial sense.
Just keep in mind, though, that the additional money you receive as a result of your deferment will not be protected by the triple lock and will only rise annually in accordance with CPI inflation.
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