A stark generational divide is fracturing Britain's retirement landscape, as nearly half a million of the oldest pensioners are being left behind by the government's flagship Triple Lock policy, an exclusive analysis reveals.
While millions on the newer, flat-rate state pension are enjoying record increases, an estimated 430,000 individuals who reached retirement age before April 2016 are trapped on the old, lower basic state pension. Despite the much-heralded 8.5% Triple Lock boost this April, their weekly income remains capped at a significantly lower rate, creating a deeply unequal two-tier system.
The Numbers Behind the Inequality
The figures are stark. A single person on the full new state pension now receives £221.20 per week. In contrast, those on the full old basic state pension get just £169.50—a staggering weekly shortfall of over £50. For couples, the gap widens to a potential £1,200 per year.
This discrepancy exists because the Triple Lock only guarantees uprating for the basic amount of the old state pension. Many on the old scheme also receive additional earnings-related payments (SERPS or S2P), but hundreds of thousands, particularly women and the self-employed, did not qualify for these top-ups, leaving them entirely reliant on the lower basic amount.
A Lifeline Many Are Missing
Campaigners are sounding the alarm, pointing to Pension Credit as a crucial but underclaimed lifeline. This means-tested benefit is designed to top up low incomes in retirement, yet an estimated 880,000 eligible households are not claiming it, missing out on billions of pounds in support.
“The idea that we have almost half a million pensioners living on significantly less than others simply because of when they retired is a national scandal,” said a spokesperson for a leading older person's charity. “Many are struggling with the same soaring energy and food bills, yet are being short-changed by a system that favours one group over another.”
How the Triple Lock Works (And For Whom)
The government's Triple Lock policy promises to increase the state pension each year by the highest of three figures:
- Average earnings growth
- Inflation (as measured by the CPI)
- 2.5%
While this mechanism has successfully boosted incomes for those on the new state pension, it has inadvertently cemented a financial cliff-edge between pre and post-April 2016 retirees. Critics argue the policy, while popular, is unsustainable and fails to address fundamental inequalities within the pension system itself.
With the state pension forming the bedrock of most people's retirement income, this growing divide threatens to plunge some of the most vulnerable older people into poverty, while others see their incomes steadily rise.
