Mixed-age couples face £1 billion hit from Government Pension Credit raid

Tom Selby
28 February 2019

The Government has today published an impact assessment following its decision to strip mixed-age couples of the right to claim Pension Credit.

The change will come into force from 15 May 2019, at which point both partners in a couple will have to be over state pension age to qualify for Pension Credit.

You can read the full impact assessment here: https://www.gov.uk/government/publications/mixed-age-couples-benefit-impacts-of-ending-access-to-pension-credit-and-pension-age-housing-benefit/mixed-age-couples-benefit-impacts-of-ending-access-to-pension-credit-and-pension-age-housing-benefit

Tom Selby, senior analyst at AJ Bell, comments:

“Tens of thousands of mixed-age couples are facing a £1 billion hit as a result of the Government’s Pension Credit raid.

“With Pension Credit worth up to £13,273 a year versus £5,986 a year for Universal Credit, at the extreme those affected could be over £7,000 a year worse-off as a result*.

“While policymakers can reasonably argue this change has been in the offing since the Welfare Reform Act 2012, that will be little solace to those affected who face a potentially significant retirement income shortfall.

“Anyone who thinks they might be impacted should act now to claim Pension Credit while they still can.”

*Example compares couple receiving 2019 Pension Credit maximum of £255.25 a week versus standard Universal Credit payment of £498.89 a month.

Pension Credit versus Universal Credit

Pension Credit comes in two parts: Guarantee Credit and Savings Credit.

Guarantee Credit tops up your weekly income to a minimum level of £167.25 if you’re single or £255.25 if you’re a couple.

Savings Credit is extra money if you already have some savings or your income is higher than the basic state pension.

It is only available to those who reached state pension age before 6 April 2016. Single people can claim up to £13.40 a week while couples can get up to £14.99 a week.

Universal Credit combines a number of in-work benefits including child tax credits, housing benefit and income support into a single payment. For a couple over 25 the standard allowance is £498.89 a month.

You can find more information on Universal Credit here: https://www.gov.uk/universal-credit/what-youll-get

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