Guest Commentary: The Impact of Pension Credit Changes on Mixed-Income Couples

On May 15, the rules governing certain people’s eligibility for the pension credit changed.
Before this date, people in a couple, where one person is over the legal retirement age (SPA) and the other below, would both be eligible for the pension credit when the elderly person has reached the SPA.

Now they have to wait for the younger one to do it. The government estimates that 60,000 couples will be affected within five years, generating annual savings of £385million.

For low-income mixed couples, this policy change could have serious effects.
They are expected to claim Universal Credit instead of Pension Credit – a benefit designed for the sole purpose of encouraging people of working age to find and increase paid work.

As a result, mixed-age couples on Universal Credit are very likely to be worse off than those on Pension Credit, seeing their retirement savings offer less value and leading to increased pensioner poverty.

The base income rates for Pension Credit and Universal Credit for couples are very different. Under Pension Credit, a couple would receive a guaranteed minimum of £255.20 per week, compared to £115.13 under Universal Credit.

In addition, pension credit provides access to other sources of social security income that universal credit does not. As a result, the Pensions Policy Institute estimates that in specific circumstances couples could be worse off by more than £10,000 a year.