State pension: Why are millions of British OAPs losing money in next April's pension uplift?
Nearly seven million retirees are set to lose out on the full state pension uplift next April.
The “triple lock” guarantees that pensions rise each year by the highest of inflation, wage growth, or 2.5 per cent.
With wage growth currently at 4.6 per cent, the full “new” state pension will climb by £551 to £12,524 a year. Those on the “old” state pension will see their income rise to £9,634.
But for 6.9m pensioners on the older scheme, a large chunk of their retirement income comes from the additional earnings-related pension (Serps), which only increases in line with inflation.
With July’s inflation figure at 3.8 per cent, these retirees will receive only around 80 per cent of the uplift on that part of their pension - leaving them short by hundreds of pounds a year compared to those on the newer system.
The final figures for next year’s rise will be set in October, based on September’s inflation data and average wage growth between May and July.
Experts have warned that this split risks creating a “hidden layer” of pensioner poverty, even as the overall state pension bill soars.
The Office for Budget Responsibility (OBR) claimed costs could reach £200bn by 2073, with the state pension age already scheduled to rise to 67 by 2028 and 68 by 2046.