Are YOU one of the 8 million pensioners about to lose out on a chunk of cash from their state pension this week? Our money experts reveal exactly who is going to be short-changed – and what to do about it

Millions of retirees were given a massive 4.8 per cent increase in their state pensions on April 6; This is one of the largest increases in the last decade.

An increase of up to £575 per year is a welcome boost for pensioners as energy bills are set to rise and there is a new cost of living crisis.

But Money Mail and This is Money can reveal around 8.1 million people will not receive the full increase.

Our analysis shows that fewer than two in five pensioners have been given the full 4.8 per cent increase in their full pay.

More than £100 of income is being missed out this year due to outdated rules penalizing older pensioners while young pensioners are enjoying huge pay rises.

A smaller increase would be a huge disappointment for retired households bracing for rising bills triggered by the oil and energy crisis triggered by the Iran war.

It is more difficult for retirees, who generally earn lower incomes than those of working age, to protect themselves against rising costs. This means retirees must now be prepared for higher food costs and energy bills, while also struggling with inflated prices at the gas pumps.

Low increases will be even more painful for retirees who feel their income is protected by a ‘triple lock’. This political promise, which continued under the Labor Party, provides for state pensions to be increased by wages at the highest rate of inflation, or 2.5 per cent.

Former pensions minister Baroness Ros Altmann says: ‘The triple lock is a bit tricky. This is a political structure. This is not what it sounds like and it is not what it is perceived to be.

‘Older retirees do not benefit much from this. Older retirees cannot benefit from the triple lock as much as young retirees. The poorest and oldest are less protected than the youngest and better off.

‘It should be the other way around. ‘We need to properly review how we increase the state pension.’

Here Money Mail explains how to work out if your retirement income might be short-changed.

How is your increase calculated?

The triple lock is praised as the golden mechanism that protects retirees from rising costs. It is a promise to increase state pension payments at the maximum rate every year. inflationwage increase or 2.5 percent.

The payments matched the highest level of the previous September’s consumer price index (CPI) inflation figure, the average earnings increase from the previous May to July, or 2.5 percent.

This year, earnings growth was used to determine the size of the pension increase; because this increase was 4.8 percent compared to the inflation rate of 3.8 percent.

The triple lock has become a political football in recent years, with both the Conservatives and Labor listing it as a key manifesto commitment in the 2024 General Election. Labor has promised to keep this to the rest of Parliament.

Reform’s Nigel Farage even promised last week that the party would be locked in if it won the next election.

However, a triple lock is not applied to the total amount paid to millions of elderly retirees.

It only protects the ‘basic’ state pension which is linked to your National Insurance record. Other factors only increase with inflation; this year it is 3.8 percent lower.

The lockdown on Monday meant the new state pension paid to those reaching retirement age after 2016 rose from £230.25 per week to £241.30, or £12,547.60 per year. This represents an increase of £575 per year.

In the 2025-26 tax year, the full basic state pension was £176.45, while the maximum amount for supplementary earnings was £222.10.

In theory, anyone reaching state pension age after 2016 will usually receive this fixed payment rate if they have 35 years of NI registration.

They must have at least ten years of NI contributions to receive any state pension.

The triple lock also increased the old, basic state pension from £176.45 a week to £184.90, or £9,614.8 a year.

This is the basic part of the old state pension paid to anyone who reached state pension age before 2016. Approximately 30 years of NI payments are required to receive this amount.

But this headline figure is lower than the same payment to young retirees.

This is because the old state pension consisted of two parts. This basic state pension, based on your NI registration, is your first pension. The second part is the ‘additional state pension’, which takes into account your earnings and whether you are claiming benefits.

This was called the state earnings-related pension scheme (Serps) from 1978 to 2002, and then the State Secondary Pension Plan (S2P) from 2002 to 2016.

Retirees will automatically accrue this extra amount throughout their working lives.

The amount of money you receive in additional state pension payments depends on your NI contributions, your earnings and whether you opt out of the scheme (known as opting out).

Importantly, these ‘additional state pension’ elements are not protected by the triple lock. Instead, they increase with inflation, which is only 3.8 percent.

The triple lock has become a political football in recent years, with both the Conservatives and Labor listing it as a key manifesto commitment.

Lose £115 a year

While it may seem like a minor administrative difference, this sneaky twist in the rules means younger retirees often receive a larger increase in their monthly payments than older retirees.

Some of these additional Serps payments are just a few pounds a week. But for other pensioners the additional state pension component makes up more than half of their weekly payments.

This means the majority of state pensions will increase by a smaller amount.

Take, for example, someone who earns the maximum amount of both the basic state pension and the supplements.

In the 2025-26 tax year, the full basic state pension was £176.45, while the maximum amount for supplementary earnings was £222.10.

This maximum for the earnings-related part of the payment includes any Serps, S2P and any additional state pension you may inherit from your partner.

That means 55 percent of the monthly payment for someone receiving the maximum amount increased at a lower rate this week.

On Monday, the basic state pension payment rose 4.8 per cent weekly to £184.90, while the maximum additional amount rose 3.8 per cent to £230.54.

In total, this means the most a person who reached state pension age before 2016 could receive from their old state pension each week is £415.44.

However, if their full pension had increased by 4.8 per cent they would have received £417.66, an extra £2.22 per week. Over the course of a year this totals up to £115.44.

Over 20 years this difference totals £2,308. And that figure doesn’t take into account future increases, so it will actually be higher.

Former pensions minister Steve Webb argues: ‘Everyone would like their entire pension to grow at a higher rate.

‘But although supplementary state pensions are not growing in line with wages, older state pensions in general are still rising faster than inflation.’

Sir Steve, now a partner at consultancy Lane Clark and Peacock, adds that anyone receiving phased retirement benefits, a forerunner of Serps which operated between 1961 and 1975, will only receive an inflation-related increase on that part of their income.

Young retirees shot

Some pensioners receiving their full new state pension have also been affected by the rule quirk.

When the new state pension was introduced in 2016, there were some retirees who would have been better off under the old system. This may be because they have accumulated enough additional state pension early in their working lives to qualify for more than the basic fixed wage.

These old rights were ‘protected’ so that they would not be lost in the new system. These protected payments place the new state pension in the same position as the old state pension.

Pensioners relying solely on the new state pension do not currently need to pay any income tax

However, these extra amounts do not have the security of a triple lock. They also increased by 3.8 percent on Monday alone.

Pensioners who have chosen to defer and receive an extended state pension when they reach state pension age will also be shortchanged.

You can delay your state pension for at least nine weeks and get more money when it starts. In the system that has been in place since 2016, your weekly income is increased by 1 percent for every nine weeks postponed.

However, this extra payment increases every year in line with inflation, rather than the triple lock.

Retirees were drawn into the tax system

Rising state pensions bring another blow to the table.

The more you take, the greater the risk you will be exposed to income tax invoice.

Pensioners who rely solely on the new state pension do not currently need to pay any income tax.

This is because a total annual income of £12,547.60 is below the £12,570 threshold at which someone is liable to pay tax.

However, this tax-free allowance has been frozen since 2021. This means that as incomes rise in line with the triple lock, more low-income households will be dragged into the tax system in a secret raid.

Frozen thresholds will drag anyone receiving the full new state pension into the tax system from next year.

Low-income state pensioners will soon have to give the money back to the state. If the triple lock increases payments in April 2027 by a minimum of 2.5 per cent, annual payments will be around £12,861.

This means that if the pensioner has no other income, tax will be payable on £291 of the income; that’s a bill of just over £58.

But some pensioners (those who postponed their state pension start date or paid high due to high earnings-related increases) already pay income tax on their payments.

For example, someone receiving the full basic state pension plus the maximum earnings-related payment would receive £415.44 a week.

This corresponds to an impressive figure of £21,602.88.

Everyone gets a tax-free allowance of £12,570 each year. But the remainder is taxed at 20 per cent for basic rate taxpayers.

This means a pensioner with a state pension income of £21,602.88 and no other pension benefits would need to give the taxman just over £1,806.

Will you face a tax bill on your retirement income? moneymail@dailymail.co.uk