Millions of UK pensioners who retired before 2016 are voicing growing frustration over a widening pension gap after the Department for Work and Pensions (DWP) confirmed they will not receive the same level of support as those who retired after the introduction of the new state pension system.
Despite this year’s triple lock increase to the state pension, which saw payments rise by 8.5%, pre-2016 retirees will still receive significantly less than their counterparts under the newer system, prompting calls for reform.
What’s the Issue?
In April 2016, the UK government introduced a new state pension designed to simplify the pension system. However, the reform also created a long-term disparity in payments, effectively splitting pensioners into two groups:
- Pre-2016 retirees receive the basic state pension, currently around £169.50 per week or £8,814 annually.
- Post-2016 retirees qualify for the new state pension, now worth approximately £221.20 per week, totalling £11,502 annually.
That’s a difference of nearly £2,700 per year, despite both groups paying into the National Insurance system.
The Triple Lock: Not Enough to Bridge the Gap
The triple lock mechanism guarantees that state pensions rise each April by the highest of the following:
- Inflation (CPI)
- Average earnings growth
- 2.5% minimum
Both the basic and new pensions are subject to this rule. In April 2025, this resulted in a 4% uplift across the board, providing around £354 more per year for those on the basic pension.
But here’s the catch: because the base rate of the new pension is higher, the same percentage increase leads to bigger cash gains for post-2016 pensioners. This compounds the gap every year.
Why the Disparity Exists
Those who retired before 2016 remain on the legacy system, which includes the basic state pension and possible add-ons, such as:
- Additional State Pension (SERPS/S2P): Based on earnings and National Insurance contributions.
- Graduated Retirement Benefit: For those who paid into the system between 1961–1975.
While some individuals may receive more than the basic pension through these schemes, many receive far less than the flat rate paid to post-2016 retirees.
Further complicating matters is the issue of contracting out. Many workers were part of occupational or private pension schemes and opted out of SERPS, resulting in a reduced entitlement under the state pension scheme. Unfortunately, this historical decision continues to affect pension income for many.
Real-World Impact
According to the latest DWP estimates, over 7 million pensioners in the UK retired before the 2016 reforms and are affected by this two-tiered system. Many of them feel overlooked and unfairly penalised for retiring before the changes were implemented.
“I worked and paid into the system all my life, yet I receive hundreds less a month than someone who retired just a year later,” said Susan, 72, from Manchester. “How is that fair?”
Charities and campaigners have raised concerns that lower-income pensioners, many of whom are women who took career breaks or worked part-time, are disproportionately affected.
DWP Response and Public Backlash
The DWP has defended the dual structure, stating that the new system only applies to people who reached State Pension age on or after April 6, 2016, and that transitional arrangements were made to protect people with existing entitlements.
In a statement, a spokesperson for the department said:
The state pension system has undergone substantial reform to ensure fairness and sustainability. The triple lock ensures that all pensioners see their payments rise each year.”
Still, public pressure is mounting. Pensioner advocacy groups are urging the government to review the current framework and consider equalising the base pension rates, or at the very least, offer additional support to those on the older scheme.
Potential Policy Reforms?
There have been suggestions that future budgets could include:
- A top-up for basic pensioners to narrow the income gap.
- A review of the contracting-out penalty, which continues to affect thousands.
- Means-tested supplements to support the most vulnerable pensioners.
However, no formal policy changes have been announced as of April 2025.
What Can Affected Pensioners Do?
If you retired before 2016, it’s worth checking your full pension entitlement. You may qualify for Pension Credit, Winter Fuel Payments, or housing assistance.
Useful links:
Conclusion
While both groups of pensioners benefit from the annual triple lock, the underlying differences in the old and new state pension systems mean that many older pensioners continue to miss out. With a general election looming, this disparity could become a flashpoint for political debate and a crucial issue for millions of older voters.
Until meaningful reforms are introduced, pensioners who retired before 2016 will need to rely on existing benefits and continue pressing the government for fairer treatment.
Pankaj Kumar is a journalist at Chandigarh X, covering admit cards, recruitment, and government schemes. His articles provide readers with detailed insights into application processes, eligibility, and exam updates.
Outside of work, Pankaj enjoys traveling, fitness, and cricket, often participating in local matches on weekends.