More than 10 million UK state pensioners will not receive the maximum cash increase from next April, despite the State Pension rising by 3.9% under the triple lock. Of around 13.3 million recipients, only about 3.2 million are expected to receive the full increase of roughly £489 a year on the new State Pension.
The 3.9% Increase Will Not Mean £489 For Everyone
The triple lock is a percentage increase, rather than a fixed payment. For 2027, the State Pension is due to rise by 3.9%, based on average earnings growth being higher than September inflation and the 2.5% minimum.
Someone receiving the full new State Pension would see their annual payment rise to around £13,036, an increase of approximately £489. People receiving less than the full entitlement will receive a smaller cash increase.
Millions Receive A Reduced State Pension
Department for Work and Pensions figures show that around 2.3 million people receive a reduced new State Pension. This can happen for several reasons, including having been in a contracted-out occupational pension scheme or having fewer qualifying National Insurance years.
These pensioners will still receive the 3.9% percentage increase on their entitlement, but their cash increase will be below £489. A further 1.9 million people receive a reduced basic State Pension and will also receive a smaller increase.
Six Million Receive The Full Basic State Pension
Around 6 million people receive the full basic State Pension. For these pensioners, the 3.9% increase would add around £374 a year, taking the annual payment to approximately £9,989.
The weekly payment would rise from around £184.90 to £192.10. The full new State Pension would rise from approximately £241.30 to £250.70 a week.
Hundreds Of Thousands Living Abroad Will Receive No Increase
Around 420,000 pensioners living abroad will not receive the 3.9% increase because their State Pension payments are frozen in their country of residence.
Official figures show that around 338,000 people living overseas have a frozen basic State Pension. Another nearly 82,000 have a frozen new State Pension.
Popular destinations affected include Australia, Thailand and the United Arab Emirates. The government has indicated that there are currently no plans to unfreeze these payments.
Why Some Pensioners Receive Less
The amount someone receives depends on their individual State Pension entitlement. National Insurance contributions and credits are among the factors used to determine entitlement.
People who were contracted out of part of the State Pension system before 2016 can also have different entitlements. This means two pensioners who receive the same percentage increase can see very different changes in the amount paid into their accounts.
Experts Warn Against Focusing On The Headline Figure
Andrew Tully of Nucleus said the widely reported £489 increase applies only to someone receiving the full new State Pension. He said millions of pensioners would receive less than that amount because their entitlement is below the full rate.
Tom Selby of AJ Bell described the State Pension system as a “thicket of complexity”, noting that people receiving the older basic pension can have additional entitlements such as SERPS.
The combination of different pension arrangements means the headline increase does not reflect what every pensioner will receive.
State Pension Rates Have Continued To Rise
The latest increase follows several years of higher State Pension payments. The full new State Pension has risen from around £156 a week in 2016 to approximately £251 in 2027.
Over the same period, the full basic State Pension has increased from around £119 to £192 a week. The 2027 figures show the continued difference between the two pension systems.
What Pensioners Can Expect From April 2027
The 3.9% triple lock increase will apply to the full basic and new State Pension rates from April 2027. The full new State Pension is expected to reach around £13,036 a year, while the full basic State Pension would reach around £9,989.
Yet the amount each individual receives will depend on their own entitlement.
For the millions receiving a reduced pension, the cash increase will be below the headline figures. Pensioners living in countries where the UK State Pension is frozen will not receive the 2027 increase at all.
| Year | Basic state pension / week | Basic state pension / year | New state pension / week | New state pension / year |
|---|---|---|---|---|
| 2016 | £119 | £6,204 | £156 | £8,094 |
| 2017 | £122 | £6,360 | £160 | £8,297 |
| 2018 | £126 | £6,549 | £164 | £8,546 |
| 2019 | £129 | £6,718 | £169 | £8,767 |
| 2020 | £134 | £6,981 | £175 | £9,110 |
| 2021 | £138 | £7,155 | £180 | £9,339 |
| 2022 | £142 | £7,376 | £185 | £9,628 |
| 2023 | £156 | £8,122 | £204 | £10,600 |
| 2024 | £170 | £8,814 | £221 | £11,502 |
| 2025 | £176 | £9,175 | £230 | £11,973 |
| 2026 | £185 | £9,615 | £241 | £12,548 |
| 2027 | £192 | £9,989 | £251 | £13,036 |
