Pensions 

Govt to save £400m from pension credits

Govt to save £400m from pension credits

The government will save £395m between 2019 and 2022 from the recent changes to pension credits.

Pension credits used to be available to pensioners who reach state pension age regardless of the age of their partner.

But earlier this month, Guy Opperman, minister for pensions and financial inclusion, announced that new pensioners whose partners were younger than the state retirement age of 65 can no longer claim a pension credit.

"Pension credit is designed to provide long-term support for pensioner households who are no longer economically active. It is not designed to support working age claimants," he said in a written ministerial statement at the time.

In a written answer to Parliament yesterday (January 29), Mr Opperman revealed the estimated saving from the policy change was close to £400m over the space of three years. 

This relates to couples who are not in receipt of either pension credit or pension-age housing benefit at the point the changes are introduced. 

Estimated overall savings

Year

2019/20

2020/21

2021/22

 

£45m

£130m

£220m

Currently, some 115,000 couples are in receipt of either pension credit or pension age housing benefit where one partner has reached state pension age and the other has not, he added.

Under the new rules, which will be introduced from May 15, pension age partners will be forced to claim working-age benefits alongside their younger partners.

When single people reach state pension age, they move from working-age benefits to pension age benefits.

Age UK said this could affect the poorest pensioners the hardest, with mixed-age couples potentially losing out on about £7,000 per year.

maria.espadinha@ft.com

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