Oldest state pensioners warned over 'hidden' DWP rule that will 'punish' them
The oldest state pensioners in the country have been warned they are missing out. The Department for Work and Pensions (DWP) currently pays out the state pension to older people in the UK who have reached state pension age - age 66 - if they claim it.
It has been warned the oldest pensioners have lost out on over £1,000 thanks to “complex” changes to the state pension system, though. Men born before April 6 1951 and women born before April 6 1953 receive the old state pension.
Not all of the Basic - or "old" - state pension is covered by the Triple Lock. Those on the old state pension can also draw money from an additional earnings-related pension, known as Serps, which rises by the rate of inflation every year.
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But the difference between it and the Full, or "new", state pension is widening and it means retirees on the old state pension will have lost out on £1,031 by April 2025 compared to a pensioner on the new system. Sir Steve Webb, a former pensions minister and architect of the new state pension, now a partner at pension consultants LCP, said: “It is true that new state pensioners benefit from the triple lock on a larger slice of their pension than those on the old system.
“But changing this would be far from straightforward. The Serps calculation under the old system is unique to each individual and it would be horribly complex to try to deliver to each individual on the old system a triple lock increase based on their own individual circumstances.
“Many people on the old state pension retired in an era when pensions in retirement were linked only to prices, so they have enjoyed a substantial improvement in their annual increases, just not as much as those on the new state pension”.
Caroline Abrahams, of charity Age UK, said: “If you are in advanced old age and struggling to make ends meet, it must be galling to learn that some people who retired more recently than you are receiving a higher state pension. This is especially true if you paid all your National Insurance contributions, meaning there was no more you could have done to maximise your state pension income in retirement.
“In an ideal world, there would be more consistency in the amounts of state pension different age groups of older people receive when they are in similar circumstances. But unfortunately that’s not where we are today, and it is understandable that some pensioners feel resentful as a result.”
A Department for Work and Pensions spokesman said: “We do not recognise these figures. The new state pension system has been designed to correct some of the historic unfairness in the previous system, in particular for women, self-employed people and lower paid workers. The Government is committed to ensuring pensioners enjoy the dignity and respect they deserve in retirement and care has been taken to ensure fairness to those on the basic state pension and the new state pension. All pensioners receiving the state pension will benefit from the triple lock over the course of this parliament.”