Older state pensioners could receive a smaller increase to their payments than newer retirees next year, with current Triple Lock estimates pointing to a difference of more than £100 annually between the two groups.
The forecast rise for the 2027 state pension is currently based on wage growth figures, which suggest payments could increase by 3.9% from April. The increase would affect millions of pensioners across the UK, with the size of the rise depending on whether they receive the new state pension or the older basic state pension.
New And Old State Pension Payments Face Different Increases
The new state pension, introduced in 2016, is expected to receive a larger cash increase because its weekly payment level is higher.
Under current estimates, people receiving the full new state pension could see their annual income rise by around £488 to £514, depending on the final calculation used. The new system applies to men born after April 5, 1951 and women born after April 5, 1953.
Older pensioners who reached state pension age before April 2016 receive the basic state pension system. According to estimates from financial firm Hargreaves Lansdown, this group could receive an annual increase of around £374.
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Triple Lock Calculation Could Be Driven By Wage Growth
The Department for Work and Pensions (DWP) must increase state pension payments each year under the Triple Lock system. The rule guarantees an increase based on whichever is highest among inflation, average earnings growth, or the minimum 2.5% increase.
Current figures indicate that earnings growth is ahead of inflation. Inflation is currently measured at 2.9%, while average wage growth stands at 3.9%, meaning wage growth is expected to determine the April 2027 increase if the figures remain similar.
According to Express, the latest pension forecasts from Hargreaves Lansdown suggest that the final Triple Lock increase will be determined by the official figures used by the government at the next Budget.
Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown, said wage growth was currently the leading measure for the Triple Lock calculation.
Pensioners Could See Weekly Payments Rise From April 2027
Ms Morrissey outlined the possible payment changes if the 3.9% increase is confirmed.
“Such an increase would put someone on the full new state pension on course to receive £250.70 a week from next April – up from the current £241.30 per week. Someone on a full basic state pension [ie the old state pension] would receive £192.10 a week – up from £184.90.”
The final increase could still change before the government confirms the official figures. The Triple Lock calculation uses specific inflation and earnings data gathered before the final announcement.
The minimum possible increase would be lower if the 2.5% floor applied instead. Under that scenario, a new state pension recipient would receive a rise of about £313.69 per year, while an older state pension recipient would receive around £240.37 annually.
Retirement Planning Remains A Focus For Pension Savers
The forecast rise would increase pension incomes, though financial experts have warned that the state pension alone may not cover all retirement costs.
Ms Morrissey said: “This will be a welcome boost to pensioner incomes but even a full state pension is only ever going to cover the basics. If you want to live well in retirement, then you will need to take your pension planning into your own hands.”
She also encouraged workers to review their personal pension arrangements and consider increasing contributions where possible.
“If you have a gap between what you have and what you need, then taking small actions, like boosting contributions every time you get a pay increase or a promotion could have a big impact over time.
“Your employer might also be willing to increase their contribution if you increase yours – known as the employer match – and this can also make a big difference. This steady drip feed of contributions invested over the long term can transform your retirement.
“If you’re worried that you’ve neglected your pension, then it’s important to say that it’s never too late to make a difference to your retirement.
“Take stock of what you have, and if you have any extra money to contribute, it can still make a huge difference. You can usually access money in a pension from age 55 (rising to 57 in 2028).”
The government is expected to confirm the final Triple Lock increase during the October Budget process, using the official figures available at that time.
