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Pensioners will be handed a state pension Triple Lock boost next April as part of the Budget announcements made by Rachel Reeves today – but millions won’t get the benefit of the money at all.
Chancellor Rachel Reeves today announced that the government will stick to the Triple Lock promise and raise state pensions by 4.1 percent from April 2025, which she said amounts to £470 a year for those on the full new state pension.
But not everyone is on the full new state pension. For those who retired before 2016, they will only get the basic state pension, which is lower, and the amount you will get will be almost entirely wiped out by the loss of the Winter Fuel Payment, which Labour has decided not to reinstate.
This means the full new state pension will go up from £221.20 a week to £230.30 a week, an increase of £473.60 a year. The full basic state pension will go up from £169.50 a week to £176.45 a week, delivering a £361.40 a year boost.
But in reality, many pensioners get less than the full amount of either pension, and as millions of pensioners lose access to the Winter Fuel Payment this year, worth £200 or £300, many people will effectively get no pay increase at all
Martin Lewis, speaking on his The Martin Lewis Podcast on BBC, Spotify and Apple Music, urged ‘caution’ for state pensioners because most retirees will not get anywhere near to the £470 figure that is set to boost pensions in next April’s Triple Lock.
He said: “If you look at the numbers, only 1 in 4 pensioners are on the new state pension, the rest are on the old state pension because they hit state pension age beforehand.
“The old state pension is less than the new state pension therefore a 4.1 percent rise in the old state pension is not as much.
“You need full qualifying National Insurance years. If you don’t and millions don’t, especially many of the poorest, then you won’t get the full rise because it is a 4.1 percent rise on what you’ve got, and the £363 a year for the old state pension is if you’re on the full old state pension but many aren’t on the full one so they will get less than that.”
Martin then added: “In the debate over Winter Fuel Payments, what’s often quoted is the Triple Lock increase of £475, but only 1 in 4 pensioners get the new state pension which is the higher amount and many of those won’t be on the full new state pension.”
Even for those maxing out their new state pension, they will only be £170 better off after the £300 Winter Fuel Payment is taken into account. And those on the full basic pension will be just £63 better off – and that’s only if they have a full National Insurance record.