Approximately 450,000 state pensioners are set to be excluded from this year’s £575 Triple Lock increase, with three specific groups hit hardest by the Department for Work and Pensions (DWP) policy.
The Triple Lock, designed to boost state pensions annually by the highest of wage growth, inflation, or 2.5%, will not apply to retirees living overseas in many countries, those lacking sufficient National Insurance contributions, and individuals who were “contracted out” of the state pension scheme before April 2016.
Foremost among the excluded are 453,000 pensioners residing abroad. The DWP freezes state pension rates at the point of emigrating for those living outside the European Economic Area (EEA), Gibraltar, Switzerland, or countries without UK social security agreements. This impacts Brits living in popular retirement destinations like New Zealand, Australia, and Canada, who will not receive annual Triple Lock increases.
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Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, warns that this pension freeze can significantly erode purchasing power over time, underscoring the importance of thorough planning before retiring abroad.
Additionally, pensioners without the required number of National Insurance contribution years will miss out on the full benefits. Jemma Slingo, pension and investment specialist at Fidelity International, notes that while the basic state pension will rise by the Triple Lock, any additional state pension top-up linked to contributions will only increase in line with inflation.
Another affected group includes those “contracted out” before April 6, 2016. For these individuals, amounts are deducted from their new State Pension, meaning they may receive less than the full £241.30 per week. Clare Moffat, pension and tax expert at Royal London, explains that if state pension claims are deferred, the deferred portion increases only by the Consumer Price Index, not the Triple Lock rate.
In summary, the £575 Triple Lock rise will not reach all pensioners equally, with overseas residents, those with insufficient contributions, and former contracted-out workers among those disadvantaged by current policies.