State pension hits 11,500 tomorrow – yet millions face 2,700 shortfall | Personal Finance | Finance [Video]

This will lift the new state pension to £11,501 for those who get the maximum amount, but millions get thousands of pounds less and will feel hard done by as a result. Why are they losing out?

One reason is that there are two state pensions. Anyone who retired from April 6, 2016, will qualify for the single-tier new state pension, while those who retired before then get the basic state pension.

Under the triple lock, both increase each year either by earnings, inflation or 2.5 percent, whichever is highest.

The problem is that the basic state pension starts from a lower point. So each year’s increase is worth relatively less, and the gap widens every year.

From Monday, the new state pension will increase by £901 to a maximum of £11,501, while the basic state pension rises just £690 to around £8,813 a year. 

That is a staggering £2,688 less. 

The …