Those potentially excluded from the state pension's triple lock incentive.
Unfiltered Guide to State Pension Triple Lock Eligibility
Living the golden years isn't always a breeze for every retiree. Here, we delve into the intricacies of the State Pension Triple Lock, uncovering who's in and who's out. This policy ensures your State Pension boosts by the highest of three figures: average earnings growth, Consumer Price Index (CPI) inflation, or 2.5%.
Expat Pensioners' Struggle
- Who's Affected: British expats living in countries like Australia, Canada, India, New Zealand, and South Africa often face challenges as their State Pensions don't increase with the Triple Lock. About 450,000 pensioners are under the "frozen state pension" policy, according to End Frozen Pensions.[1]
- Triple Lock Conundrum: The Triple Lock increase applies to pensions, yet if a pension gets frozen, the increase under the Triple Lock won't take effect in frozen-pension countries.
Extra State Pension Holdouts
- Who's Eligible: Pensioners receiving the extra State Pension (State Earnings-Related Pension Scheme or SERPS) from contributions before the new State Pension's introduction might still be eligible for the Triple Lock on their basic State Pension.[2]
- Triple Lock Reality: The Triple Lock applies to the basic State Pension portion, not the additional State Pension itself. Without the Triple Lock, the additional State Pension still increases annually, but not under the Triple Lock mechanism.
Deferring State Pension
- Who's in: Individuals who defer their State Pension but start claiming at a later age still benefit from Triple Lock increases during their deferral period.[2]
- Triple Lock Impact: The deferred pension increases by the Triple Lock for each year it's deferred, plus an extra increase for each year deferred, subject to a cap.[2]
While the Triple Lock is generous for most UK pensioners, it's essential to understand how factors like living abroad or deferring pensions can impact the benefits. Stay in the loop and make informed decisions for your retirement.
[1] William Cooper, marketing director at insurance firm William Russell. [2] Sarah Pennells, consumer finance specialist at Royal London. [3] Government and public services, social security, pensions, state retirement pension. [4] Tom Selby, director of public policy at the investment platform AJ Bell. [5] Interactive Investor, investment platform.
- British expats living in countries like Australia, Canada, India, New Zealand, and South Africa might be excluded from the Triple Lock increase on their State Pension due to it being frozen, according to End Frozen Pensions.
- Pensioners who deferred their State Pension and start claiming at a later age will still benefit from Triple Lock increases during their deferral period, as stated by the experts at Royal London.
