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New pensioners with younger partners can no longer claim pension credit

29 January 2019 Written by Prosperity Financial Solutions Category: Pensions

From the 15th May 2019, pensioners who live together as a couple will only be able to make a new claim for pension credit if both partners are over the state pension age – a change which could cost some £7,000 per year.

What is pension credit?

Pension credit is a benefit which some can apply for to top up their income once they’ve reached state pension age, however, it is estimated that more than 50,000 pensioners who have not claimed their pension credit. Pension credit is made up of two parts:

  1. Guaranteed credit – If your weekly income is less than £163 for a single pensioner, or your joint weekly income is less than £248.80, your income will be topped up to this level.
  2. Savings credit – This tends to be available for those who reached state pension age before 6th April 2016 and have some retirement savings. You could be eligible for up to £13.40 extra per week as a single person or £14.99 a week if you are in a couple.

Pension credit gives a guaranteed minimum income to those over the state pension age, which is now 65 for both men and women.

Currently, someone over 65 living in a couple can claim pension credit, regardless of their partner’s age. As of the 15th May 2019, however, these new restrictions will mean those in couples will be unable to claim if they have a partner of working age. Instead, they will be forced to claim the less generous universal credit alongside their younger partner.

Universal credit means that couples can get £114.81 a week. When compared with £255.23 available from pension credit, this amounts to a potential loss of £7,320 a year under the new laws.

What happens if I already claim pension credit?

If you are currently claiming pension credit and your partner hasn’t reached the state pension age, you will not be affected by the new rules and will continue receiving it for as long as you are eligible. However, if you are not claiming pension credit, you are over the age of 65 (or will be before the 14th May 2019), and live with a partner of working age, make sure you apply as soon as possible.

Some welcomed the reform to pension credit. Guy Opperman, the pensions minister, concluded:

“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. This change will ensure that the same work incentives apply to the younger partner as apply to other people of the same age.”

However, the former pensions minister, Sir Steve Webb, found the timing of the announcement convenient with the Brexit vote, allowing them to ‘sneak out’ the information to avoid potential backlash:

“People who may be affected deserve to know about this change and not have it sneaked out on a day when ministers were no doubt hoping that everyone’s attention was directed elsewhere.”

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