Triple Lock creating two-tier State Pension for older people warns former DWP employee
Under the Triple Lock guarantee, the New and Basic State Pensions increase each year in-line with whichever is the highest between the average annual earnings growth from May to July, Consumer Price Index (CPI) inflation rate in the year to September, or 2.5 per cent.
However, additional elements of the State Pension, including deferred amounts, rise by the September CPI rate, something a former DWP employee warns is creating a 'two-tier uprating system for pensioners'.
Sandra Wrench has 42 years experience in dealing with State Pensions and benefits delivered by the DWP and previously wrote to DWP Ministers in 2023 expressing her concerns.
Mrs Wrench told the Daily Record how some pensioners may not be aware that this year's Triple Lock uprating of 4.1 per cent only applies to the New and Basic State Pension payment rates; additional components have risen by 1.7 per cent - the September CPI inflation rate. This is also the uprating applied to Universal Credit and other benefits delivered by the DWP.
It's important to highlight that devolved benefits in Scotland, including Adult and Child Disability Payment, Pension Age Disability Payment, Carer Support Payment and Pension Age Winter Heating Payment, also increased by 1.7 per cent this month.
The ex-DWP employee said: 'The Triple Lock guarantee only covers the BASIC State Pension and not all components, the other components being Additional Pension (the scheme which existed between 1978-April 5, 2016 and which you could contract out of), Graduated Pension (1961-1975), increments for deferring your State Pension, and the protected pension which is any amount in excess of the 100% rate of the new 100% State Pension which you might be entitled to at April 6, 2016.
'With the calculation of the New State Pension at April 6, 2016, in most cases, all the components of the old State Pension have been added together to give a basic State Pension, and where applicable a protected pension, which is the excess above the 100% rate of the New State Pension.
'So by adding all the components together this has brought components such as additional pension, within the scope of the Triple Lock, which was 4.1% this April 2025. Under the old scheme, additional pension would have just been increased by the CPI rate of 1.7% for this April 2025.'
Mrs Wrench warned: 'With The Triple Lock relating to the basic rates of the State Pension only, this has created a two-tier uprating system for those who reached State Pension Age before April 2016 where the 100% rate of the Old/Basic State Pension is currently £176.45 a week and those who reached retirement age after April 2016 where the 100% rate of the New State Pension is higher at £230.25.'
She shared an example to help illustrate the difference:
A person who was State Pension Age before April 2016, has a weekly amount of State Pension as £240.00, consisting of 100% Old/Basic State Pension of £176.45, additional pension of £59.75 and graduated pension of £3.80.
Compare this with a person who reached State Pension Age after April 2016, who also has a weekly pension of £240.00, but this consists of 100% New State Pension of £230.25 and a protected payment of £9.75.
In April 2026, the person who reached State Pension Age before April 2016, will only have £176.45 increased by the Triple Lock, compared with a person who reached State Pension Age after April 2016, who will have a higher amount of £230.25 increased by the Triple Lock.
Mrs Wrench continued: 'You can see how a person who reached State Pension Age before April 2016 has a lower percentage of their State Pension uprated by the Triple Lock compared with those who reached State Pension Age after April 2016.
'Because of this difference in basic pension and the Triple lock only relating to the basic rate of the State Pension, this will inevitably lead to those who reached State Pension Age before April 2016 falling further behind with every annual uprating.'
The insider explained that when the Triple Lock was introduced in 2011, there was only one State Pension (Old/Basic), but the introduction of the New State Pension in April 2016, calls into question whether it should also be uprated under the Triple Lock.
However, she warns that any future adjustment to the Triple Lock 'will particularly affect poorer pensioners, such as those who do not have other sources of income, those who are disabled and not able to work full time, and women with caring responsibilities who have had to work part time and who may not have had the opportunity to build up any private or work pension'.
Mrs Wrench added: 'The DWP have confirmed they cannot means-test the State Pension, so possibly the only way that the increased costs for State Pension can be addressed is through some adjustment to the Triple Lock, and to reassess the annual uprating of the State Pension.
Mrs Wrench shared two examples to help highlight the uprating impact:
From April 6, 2016, a woman, who is State Pension Age after April 2016. has a Basic State Pension of £63.63, and Additional Pension of £24.82. These two components were added together on April 6, 2016 to give her a starting amount of £88.45 for the New State Pension, and this £88.45 is now all Basic State Pension under the new scheme.
If you were State Pension Age before April 2016, under the old scheme the basic State Pension of £63.63 would have increased by the Triple Lock, and the additional pension of £24.82 increased by the lower CPI rate , but by adding the two together for the New State Pension from April 6, 2016, this means that all this amount is basic state Pension and increases by the Triple Lock. So those who are State Pension Age after April 2016 are at an advantage compared to those who reached retirement age before April 2016, as regards the Triple Lock increase.
A person who reached State Pension Age after April 6, 2016 has the full 100% rate of the basic State Pension which was then £119.30 (under the old scheme) and Additional Pension of £75.00.
Basic £119.30 plus AP £75.00 = £194.30 at April 6, 2016, which was converted into the 100% rate of the New State Pension of £155.65 (the 100% rate at April 6, 2016) plus a protected payment of £38.65.
Basic State Pension increases by the Triple Lock, but protected payment increases by CPI rate, so some of the additional pension has been converted into Basic State Pension and brought within the scope of The Triple Lock.
State Pension payments 2025/26
The DWP has published the full list of State Pension and benefit uprated payments on GOV.UK here, which also includes additional elements such as the deferred rates, which have risen by 1.7 per cent (September Consumer Price Index inflation rate).
Full New State Pension
Weekly payment: £230.25
Fortnightly payment: £460.50
Four-weekly payment: £921
Annual amount: £11,973
Full Basic State Pension
Weekly payment: £176.45
Fortnightly payment: £352.90
Four-weekly payment: £705.80
Annual amount: £9,175
Future State Pension increases
The Labour Government has pledged to honour the Triple Lock or the duration of its term and the latest predictions show the following projected annual increases:
2025/26 - 4.1%, the forecast was 4%
2026/27 - 2.5%
2027/28 - 2.5%
2028/29 - 2.5%
2029/30 - 2.5%
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