'Most older people won't get a £473 state pension increase - it's a myth'

The is crucial to millions of older people.

Hence why any talk of how much it’s going up by is seized upon. Key to the calculation is the “triple lock” - the pledge that annual increases will be the highest of either earnings, inflation, or 2.5%. With fresh figures showing inflation down to 1.7% in September, average earnings of 4.1% is likely to be the measure used for next April’s rise.

The big caveat here is that we need to wait for the Budget on October 30 to get confirmation from Chancellor about the scale of the rise.

On that face of it, it looks like the state will go by £473 a year - not bad when compared with the uplift for other benefits. But the stark reality is the vast majority of older people won’t get a £473 increase, nor anywhere near. It’s something of a myth.

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It applies to the full rate of the new state pension, which is paid to those who reached the state pension age after April 6, 2016. It is currently £221.20 per week, or £11,502.40, and is set to rise to £230.30 a week, or £11,975.60 a year. As the charity helpfully points out, just 27% of pensioners get the new state pension - equivalent to 3.4 million older people.

Yet that means nearly three quarters of pensioners - about 9.3 million people - won’t get the expected £473 increase. That’s because they are on the old state pension, given to those who reached state pension age before April 2016. It is currently £169.50 per week, or £8,814 per year. If all goes up as expected, it will rise to £176.45 a year, or £9,175.40 a year.

So, in reality, most pensioners will theoretically be around £361 a year better off. That applies if you’re a man who is 73 and older, or a women aged at least 71.

But, even then, not everyone on the old state pension will get that much extra, or those on the new state pension the £473. One reason is that they didn’t build up sufficient national insurance contributions during their working lives to qualify for the full amount.

Figures show 4% of those on the old state pension get less than quarter of the full amount, and 17% get less than three quarters. That equates to almost 1.6 million people. The numbers differ for the new state pension, but there’s still a good few older people who don’t get the full whack.

Why does all this matter? Because the vast majority of pensioners will end up getting a miserly £6.96 a week extra next April, the way things are going. True, pension credit gives extra money to help with living costs if you’re over state pension age and on a low income. But applying for pension credit can be a pain, hence why there have been such efforts of late to boost take up.