Analysis suggests that almost seven million retirees will be locked out of the full state pension uplift in April.
The “triple lock” means that the annual rate of increase in the state pension is based on the maximum of inflation, wage growth and 2.5%. The most recent numbers indicate that wage gains are at 4.6pc, effectively increasing the full new state pension of PS551 to PS12,524 a year in April. The annual income of around 8.4 million retirees on the old state pension would also increase to PS9,634.
But 6.9 million of these older retirees also receive funds in an extra earnings-related pension, also referred to as Serps, which increases by inflation alone every year. These older pensioners will receive only about 80pc of the earnings-related element of their pension as the latest inflation figure is 3.8pc as of July.
It would mean that older pensioners may lose out on hundreds of pounds a year relative to their younger counterparts.
Triple lock increases each year are pegged on the inflation rate of the previous September and the average wage growth calculated between May and July, so the size of the increase the following year will be known in October.
The Office for Budget Responsibility (OBR) indicated that the cost of the rising life expectancy and the triple lock would, by 2073, be PS200bn.
By the year 2028, the state pension age will definitely increase to 67 and by 2046, it will definitely increase to 68.
Steve Webb, a former pensions minister, now a partner at pension consultants LCP, said: ” It often comes as a surprise to people that different elements of their State pension can rise by different amounts each year.
“The additional state pension, often called Serps, has always been linked to inflation, whereas the old basic state pension has benefited from a more generous formula since 2011.
“Next year, the additional state pension will simply be linked to inflation as usual, but the basic pension will rise by the higher of inflation or wage growth – and until October, we will not know for sure which will be the key number.”
Becky O’Connor, of PensionBee, said: “It’s tempting to fall into the trap of thinking all older people are going to benefit disproportionately from state pension increases compared to working people.
“But the state pension system is complicated, and in fact, millions of older people do not get the increases, and this falls below the radar
” There is a hidden layer of pension poverty, and the majority of pensioners who rely on the basic state pension are susceptible to it. Headline increases to the new state pension hide the reality for millions.”