Thousands of UK retirees are facing a significant financial gap, as the state pension continues to fall short of covering basic living costs, a leading finance expert has warned.
The Triple Lock Promise and Pension Figures
Chancellor Rachel Reeves is expected to confirm the continuation of the triple lock in her Autumn Budget on Wednesday, November 26. This policy guarantees that the state pension increases each April by the highest of three measures: average earnings growth, inflation, or 2.5 percent.
This year, the mechanism will trigger a 4.8 percent increase from next April. This will raise the full new state pension from the current £221.20 per week (£11,973 annually) to £241.30 per week (£12,547.60 a year). Those on the full basic state pension will see their payments increase from £176.45 weekly (£9,175.40 annually) to £184.90 per week (£9,614.80 a year).
It is crucial to note that many pensioners receive less than the full amount, as their entitlement is determined by their National Insurance (NI) contributions. Typically, 35 years of full NI contributions are required for the full new state pension, and 30 years for the full basic amount.
The Revealing Shortfall in Pensioner Income
Despite these scheduled increases, analysis reveals a stark reality. Research from NimbleFins demonstrates the critical importance of the triple lock. Their calculations show that if pension increases since April 2016 had been a flat 2.5 percent, the full new state pension would now be only £194.39 per week—a staggering £1,865 less per year than the current rate.
More alarmingly, if increases had only matched inflation over the same period, pensioners would be receiving £201.71 per week. This represents an annual shortfall of nearly £1,485 compared to what they actually get today.
Erin Yurday, CEO and founder of NimbleFins, stated: "While the triple lock has raised pensions more quickly than wages in recent years, those rises are from a low baseline and still fall short of enabling a basic standard of living. Without the triple lock, pensioners would be hundreds of pounds poorer each month."
Pension Income vs. The Real Cost of Living
The core of the issue lies in the gap between the state pension and the actual income needed for retirement. According to Pensions UK, a single pensioner requires a minimum of £13,400 per year for a basic standard of living.
This is almost £500 more than the elevated full new state pension will provide after the April 2025 increase. For a moderate lifestyle, a single person needs £31,700 annually, and for a comfortable retirement, £43,900 per year—more than double the state pension.
Mr Yurday concluded: "Our analysis shows just how vital the triple lock has been in protecting older people from inflation and rising bills. But it also highlights a deeper issue - the state pension alone is not enough to live on, and many pensioners are still struggling despite these increases."
The triple lock has delivered substantial boosts in recent years, including a record 10.1 percent rise in April 2023. However, this new data confirms that for many, the state pension remains an inadequate safety net, failing to cover fundamental costs and leaving retirees exposed to financial pressure.
