State pension could rise by £742 but 500,000 pensioners will miss out
The UK state pension increases annually via the triple lock
PEXELS
The new state pension could rise by more than £700 next year under the triple lock, as the Bank of England has forecast inflation will dip slightly to seven per cent by September.
However, an estimated half a million pensioners would not see this increase, due to where they live.
The state pension only rises each year if the recipient lives in certain countries, meaning some are unable to benefit from the triple lock mechanism.
To get the increase, the person living overseas must live in the European Economic Area (EEA), Gibraltar, Switzerland, or a country that has a social security agreement with the UK (but not Canada or New Zealand).
Pensioners living in certain countries overseas won't see the annual increase
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Those living outside of these countries cannot get the yearly increases, unless they return to live in the UK, when the pension will then go up to the current rate.
Campaign group End Frozen Pensions estimates 520,000 pensioners are impacted by this policy.
Affected pensioners missed out on a significant increase this April, when the state pension increased by 10.1 per cent.
They could be set to miss out on hundreds more again next year, as May Bank of England forecasts revealed inflation is expected to drop slightly from 8.7 percent to seven percent by September.
A Government spokesperson said: “Our priority is ensuring every pensioner receives the financial support to which they are entitled.
“We understand that people move abroad for many reasons and we provide clear information about how this can impact on their finances.
“The Government’s policy on the uprating of the UK state pension for recipients living overseas is a longstanding one of more than 70 years and we continue to uprate state pensions overseas where there is a legal requirement to do so.”
If the inflation forecast is correct, and this is larger than the average earnings figure, then the new state pension would increase by £742 to £11,342 in April 2024.
The basic state pension would rise by £569 to £8,691 based on these figures.
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Pensions Secretary of State Mel Stride will conduct his statutory annual review of benefits and state pensions in the autumn
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Alice Guy, head of pensions and savings at interactive investor, said: “Pensioners could be due another bumper state pension hike next year, with inflation proving a much tougher nut to crack than the Bank of England hoped.”
She added: “The state pension forms the backbone of most people’s pension income and a rise in the state pension will be a lifeline to many people on the breadline.
“There’s a myth that all pensioners are wealthy but this simply isn’t the case with many pensioners relying on the state pension as their main source of income.”
A Department for Work and Pensions spokesman said: “As is the usual process, the Secretary of State will conduct his statutory annual review of benefits and state pensions in the autumn, using the most recent prices and earnings indices available.”
The state pension triple lock is a government commitment to uprate the basic and new state pension by the highest figure out of earnings, prices or 2.5 per cent.
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