The Triple Lock, introduced in 2010 will decide the level of uprating to be applied to the State Pension for the 2024/25 financial yeas and pays the highest between September’s Consumer Price Index (CPI) inflation rate, earnings, growth or 2.5 percent reports the Daily Record. The frontrunner for the uprating is currently earnings growth coming in at 8.5 per cent, this includes employee bonuses for the period between May and July.
The latest most recent CPI inflation rate is 6.7 percent which covers the 12 months leading up to August. It looks very unlikely that after a minute dip from 6.8 percent in July to the current figure it will rise beyond the wages growth figure when the September CPI is published in mid-October, the Daily Record reports.
Because of this, millions of pensioners could receive another substantial increase in April following this year’s uprating of 10.1 percent. Nonetheless, an estimated 500,000 older people will not qualify for any uplift to their payments – even though they have accrued the required amount of National Insurance contributions prior to retirement.
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The CEO and founder of one of the world’s biggest independent financial advisory, asset management, and fintech organisations warned earlier this year that hundreds of thousands of British living abroad in retirement bypassed the State Pension uprating applied to the contributory benefit in April. Nigel Green, of deVere Group, said that approximately 500,000 older people will “continue to have their pensions frozen in value at the point of retirement date or date of emigration”.
The latest data from the Department for Work and Pensions (DWP) shows that 12.6 million people are now receiving the State Pension in Scotland, England and Wales, including 1.1m living abroad. Some 3.2m are in receipt of the New State Pension, which is currently worth up to £203.85 per week, while those on the Basic State Pension receive up to £156.20.
Commenting recently on the 2023/24 State Pension uprating, Mr Green said: “An estimated 500,000 retired Brits who live abroad will not receive any boost at all. Outrageously, they will continue to have their pensions frozen in value at the point of retirement date or date of emigration.
“Having a frozen pension means that your retirement income falls in real terms year on year due to inflation – and never has this been more true than as the cost of living has soared.”
Retired expats in the European Economic Area (EEA) will continue to receive annual increases to their State Pensions under the Triple Lock, as will those in a host of other countries including the United States, the Philippines and Turkey.
However, Mr Green explained that the majority of affected State Pensioners live in some of the biggest Commonwealth countries – such as Australia and Canada – and, despite paying taxes all their working lives in the UK, and National Insurance contributions in full, these Brits will miss out on the uprating.
He said: “It seems completely unjust that someone living in the USA will receive an extra £1,000, yet someone just across the border in Canada, in the same situation, will not.”
If the UK Government chooses to uprate State Pensions using the lower wages growth figure (excluding employee bonuses) next April (7.8%), it would see millions of pensioners miss out on an extra £75 in 2024. However, any attempts to amend or break the Triple Lock ahead of a general election could be costly for the Conservative Party.
Estimated State Pension payments from April 2024
The estimated calculations show the current annual rates for the full New and Basic State Pensions. The ‘monthly payment’ calculated below refers to every four weeks, there are 13 payments made throughout the year.
How much someone receives depends on the number of years worth of National Insurance contributions, around 35 is needed for the full New State Pension, but this may be more if you were contracted out – find out more here.
These estimations are based on the wages growth at 7.8 per cent (excluding employee bonuses) and 8.5 per cent (including employee bonuses). Chancellor Jeremy Hunt will confirm the State Pension uprating during the Autumn Statement on November 22.
Figures have been rounded using the UK Government’s rounding policy.
Current Annual Full New State Pension – £10,600
- Weekly: £203.85
- Every four-week pay period: £815.40
7.8% uprating April 2024 – £11,427 (up £827)
- Weekly: £219.75
- Every four-week pay period: £879.00
8.5% uprating April 2024 – £11,502 (up £902)
- Weekly: £221.20
- Every four-week pay period: £884.80
Current Annual Full Basic State Pension – £8,122
- Weekly: £156.20
- Every four-week pay period: £624.80
7.8% uprating April 2024 – £8,756 (up £634)
- Weekly: £168.40
- Every four-week pay period: £673.55
8.5% uprating April 2024 – £8,814 (up £692)
- Weekly: £169.50
- Every four-week pay period: £678.00
PensionBee has an inflation calculator which enables people to see the impact of inflation on their pension savings, you can try it out here.
