Top News

State pensioners are set for another payout boost from this April thanks to the Triple Lock - but older retirees are missing out on as much as £2,932 a year in their minimum DWP payments compared to new state pensioners.

The Triple Lock automatically increases state pension payouts each year, either by inflation, wage growth or a flat 2.5%, whichever is highest. This year, wage growth is 4.8% so it is the figure used to calculate pension increases. But many may not realise that the pension system is split into two schemes depending on when you retired.

State pensioners born before 1953 if they are a woman and 1951 if they're a man will see their pension increase by 4.8% from £176.45 to £184.90 per week. This is the old basic state pension, which was replaced in 2016 and anyone who hit retirement age on or after April 6, 2016 will receive the new state pension instead.

Across a full year, that means those on the old state pension will receive £9,614.80 in state pension payments.

The full new state pension has gone up by 4.8% as well, up from £230.25 per week to £241.30 per week.

That means those on the full new state pension will receive £12,547.60 over a year. That's £2,932.80 more than the old state pension.

• HMRC confirms £2,300 tax charge for people with savings

• £300 tax charge for state pensioners - started in April

In both cases, these are the maximum amounts, for which you need roughly 30 to 35 years of National Insurance records in order to qualify.

For those stuck on the old state pension, there are ways to increase your payments, the biggest one being Pension Credit.

Pension Credit tops up your pension payouts if you currently receive less than about £238 per week from April, so most people on the old state pension will be eligible assuming they have no other income (like a private pension or second property rental).

Those who are retired on the old pension can claim Pension Credit to top up their income to £238 per week for a single person and £363.25 for a couple (these are the new April rates).

To apply for Pension Credit, call the Pension Service Helpline on 0800 991234.

Those on the old state pension can in some cases be better off than new state pensioners, though. Although the minimum DWP weekly payments are lower (unless topped up by Pension Credit), older state pensioners have in some cases qualified for Additional Pension payments or SERPs.

This now-defunct earnings-linked and employer-linked scheme would allow a state pensioner to draw additional state pension payments in retirement. In August, the Express reported on a basic state pensioner who is already paying tax on their pension due to additional Pre-97 state pension payments.

Martin Lewis' MSE explains: "Some people can get more than £230.25 [now £241.30] a week. Under the previous State Pension rules, workers were able to build up what's known as the additional State Pension (also called the state second pension, S2P or SERPS) - a top-up to the former basic State Pension. Although current rules have now scrapped this top-up, the Government has allowed many workers in their 40s, 50s and early-60s to keep their existing entitlement."