Published On: Sun, Oct 30th, 2022

State pensioners on low income could miss out on benefit payment triple lock rise | Personal Finance | Finance


Older people on low income are able to apply for Pension Credit via the Department for Work and Pensions. Thanks to the triple lock, state pensions are raised by either the rate of inflation, average earnings or 2.5 percent; whichever is highest. However, Pension Credit does not get a similar triple lock-style payment rise as it stands.

Currently, state pensioners who are eligible for Pension Credit see their weekly income topped up to £182.60 if they’re single.

If they have a partner, which includes spouses and civil partners, their joint weekly income is increased to £278.70.

Extra amounts can be given to Pension Credit claimants if they are responsible for the care of young children or someone with a disability.

Pensioners are also due to receive an extra £300 cost of living payment to help with soaring bills this winter.

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If the triple lock pledge were to remain in place, state pension payments would rise by 10.1 percent.

This would be in line with inflation and would translate to a £200 a week boost starting in April 2023.

However, it has yet to be confirmed by how much other benefit payments will be raised by next year.

Tom Selby, head of retirement policy at AJ Bell, outlined why those who get Pension Credit may not receive a similar boost.

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Mr Selby explained: “The good news for those in receipt of a state pension ‘protected payment’ or with additional state pension entitlements is the legislation requires the Government to uprate these benefits in line with inflation.

“Given inflation in September is pretty much nailed-on to be above earnings or 2.5 percent, they should see all their state benefits rise in line with prices.

“However, what happens to over 1.4 million people in receipt of pension credit – among the poorest retirees in society – is less clear.

“Legislation only requires the Government to uprate the core element of Pension Credit – the ‘standard minimum guarantee’ – in line with average earnings growth.

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“Based on average earnings growth in the three months to July, this implies guarantee credit will rise by 5.5 PE.

“Other elements of Pension Credit, including savings credit and extra top-ups for carers and those with severe disabilities, have no increase baked in.”

It should be noted that the Government has yet to reiterate its support for the triple lock on state pensions following Prime Minister Rishi Sunak’s appointment to the highest office in the land.

According to Mr Selby, a benefit payment rise is likely to be implemented next year but the rate at which it will go up is unknown.

He added: “This does not mean that there cannot be an increase – or an increase higher than earnings in the case of the standard minimum guarantee – but it does mean it is at the discretion of the Government.

“For the increase applied this year, for example, temporary legislation created as part of the decision to axe the earnings element of the triple-lock for one year saw all elements of pension credit increase by 3.1 percent, in line with the September 2021 CPI inflation figure. This legislation falls away for next year’s increase.

“Given Pension Credit is paid to the UK’s lowest income retirees, it would cause uproar if they did not receive the same protection against inflation as those in receipt of the state pension.

“The uncertainty around this is undoubtedly causing anxiety to lots of people, particularly on the back of recent energy price rises.

“The Government has the power to ease the worries of millions of people by setting out exactly what increases will be applied next year.”



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