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Forum Home  →  Discussion  →  Benefits for older people  →  Thread

Pension Credit to be abolished!

Gareth Morgan
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CEO, Ferret, Cardiff

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Joined: 16 June 2010

The FCA have published today a report ‘Retirement income market study’  - http://www.fca.org.uk/your-fca/documents/market-studies/ms14-03-2

It reveals that “For people reaching state pension age after 6 April 2016, the
new state pension will apply ... Pension credit, which currently provides a boost to the basic state pension for those on low income, will cease to exist.”

So ....  either this is an astonishing announcement, sneaked out through an unexpected route .. or .. despite more than half of total incomes of pensioners coming from benefits, the FCA know very little about them.  Given that there’s no other mention of benefits at all in the paper (remember, more than half of the total income of pensioners comes from benefits) I’m going with cock-up rather than conspiracy.

Edmund Shepherd
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Tenancy Income, Royal Borough of Greenwich, London

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I’d be amazed, especially as those with fewer than 10 years’ contributions will be entitled to no pension and those with between 10 and 35 years will be entitled to a partial pension. It’s one way of dealing with the welfare bill, I suppose.

I am inclined to agree with you, Gareth, that it’s a mistake. At first glance, it does look like Pension Credit would be abolished, as the basic SRP would be over the standard personal allowance for a single person, if you ignore premiums, partial pensions etc.

I did hear that the savings credit was due to go, though. Perhaps crossed wires.

Or we couuld be seeing Universal Credit for everyone. Wouldn’t that be nice.

FIT Advisor
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benefit advice officer, three rivers housing association, co durham

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I suspect at some point UC will be the only benefit with a higher rate paid if (both) at State Pension Age, why would they want to have 2 systems and of course this would fit with the intention that in couple claims both have to be at SPA to secure pension status.

Gareth Morgan
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CEO, Ferret, Cardiff

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Pension Credit will continue in its present two forms for all those on the current SRP scheme.

For those who will receive single-tier pensions (STP) then Savings Pension Credit (SPC) will not apply (with a possible 5 year partial transitionary element for housing). Guarantee Pension Credit (GPC) will continue for them, although in the simplest cases the higher amount of single-tier pensions may float claimants off it. GPC will still apply where there are disabilities, children, housing costs, caring responsibilities etc. which bring the ‘needs’ figure above STP level. For many, of course, they won’t get the full STP and will get GPC even at the basic level.

There will at some point be a new Housing Pension Credit as well.

I wouldn’t be surprised to see SPC vanish completely in due course; it’s been eroded substantially over the last couple of years. Because of the triple guarantee on State Pensions, the government has had to increase GPC over CPI, otherwise the SRP increase would have meant that GPC awards would have been reduced on uprating as the rate increase would have been lower. They avoided that by increasing GPC rates so there has been, typically, 5p a week increase in awards. The money has been taken from SPC by increasing the threshold level and reducing the maxima