State Pension -V- Pension Credit - only £3 difference!

If two people live on their own and have no income other than a state pension or a pension credit income - who is better off? I’d wager the person on pension credit. I believe just being eligible for £1 of pension credit opens up additional benefits you are not entitled to otherwise? Happy to be proved wrong but it’s a bit shit to be like well if you have a partner, or own a home or have a private pension you’re better off with your state pension when many people on state pension don’t have those things.

Pension credit is paid on the household income not the individual unlike the state pension

My mum was on pension credit because she was separated and she was able to have lots of work done on her house that she owned, stuff like damp proofing, building repairs for not very much as she got a large grant or something, this was quite a few years ago so may not be available now

You usually can’t get pension credit if you have significant savings - if you have over £10k in savings, the amount you receive in pension credit will be reduced. If you have more than £10,000, every £500 over £10,000 counts as £1 income a week.

The state pension is paid to those eligible regardless of how much you have in savings.

So if you have significant savings you would not be eligible for pension credit if you don’t qualify for state pension.

If you have missing years and haven't got much or any private pension it is not recommended that you do NI top ups because of this, you could end up being worse off because of the extra benefits pension credit brings

If everyone got £230 a week whether they paid in or not then nothing needs mean testing on either side. If it is because if you are on pension credit you can also have other mean tested benefits but if you have full state pension then you have the opportunity to have additional pension or income then it seems extremely unfair. Many people won’t have private pensions, paid off homes, savings over £10k or investments and even if they did those things can run out. What’s very unclear to me is what happens to someone with a full stamp but nothing else - can they get housing benefit or not?

because NI is just a tax

Because pension credit is means tested and state pension is not. You can have £50k a year from a private pension and still be entitled to your state pension, but obviously wouldn;t be entitled to pension credit.

@hoarderofthedough hate to tell you op but actually the person on pension credit is better off than someone on just full state pension because of all the attached perks like free dentist,council tax and rent help. I worked out with my neighbour who gets PC that those perks completely cancel out my small NHS pension as i have to pay full council tax etc🥴

This is the basic argument behind universal basic income.

Because pension credit is means tested and SP is not. You could not qualify for PC because of a private pension or savings, but still qualify for state pension.

For example, my private pension and my savings would both exclude me from claiming PC, but since I've paid my contributions, I will still be entitled to the full state pension.

This. You can’t get pension credit if you have any other form of income i.e a private pension.

People on benefits get contribitions to state pension paid as do mothers who are claiming child benefit so paying contributions doesn't have to be from work.

I do sometimes wonder if I shouldn't have paid into my NHS pension all my working life, at some points I could have used the extra money. I am a renter so will likely need to claim housing benefit once I retire to help towards my rent as have no means to buy. Pension credit does open gates to other things though such as free TV licence.

But we don't know what position the benefits sector will be in once I retire in 17 years so I will keep contributing to nhs pension and be grateful I have this.

Pension credit is the pensioners version of Universal Credit; it is means tested, so you can't have savings over the limit, and if you have other income such as a private pension then your pension credit is reduced, or you are not entitled at all.

State pension is not means tested, so you still keep it all no matter what savings and other income you have.

This ^.

Not many people can live a comfortable life on £240pw whether it's state pension or pension credit. Most people have some private pension and/or other savings and investments on top of their state pension. Pension credit is only available to those who don't have these.

Although they may be paying more or less the same, when you have a state pension you can have personal pensions, savings and continue to work without being penalised.

Pension credit is means tested.

I think Pension Credit also unlocks doors to other things, doesn't it? Not sure what exactly. So they would need to track it because of that. But that seems to make it more unfair. I think to be honest we just need to accept and be happy for that fact that regardless of what work people have/haven't been able to do (or chosen to do/not do, for whatever reason)that we live in a society where all our OAPs are looked after to the extent that they able to live without being in abject poverty. Just like those who are childfree have to accept that they pay tax towards schools that they won't directly benefit from (although indirect benefit in terms of future doctors etc)

At the moment, getting PC automatically qualifies you for full HB up to the local housing allowance rate if you rent and live alone and the maximum reduction in council tax (80%?). If it was merged with state pension, every pensioner's claim for HB/CTR would have to be assessed.

That's how come MIL, who only worked a few years in her life, gets a good chunk more from the state than I do after working for over 50 years.

You won’t get pension credit if you have contributed next to nothing or not got enough credits, lived under the radar or have inherited AND have assets ( savings, houses, etc) - you will get zilch or upwards of zilch but not full state pension nor pension credit and yes there are people like this

You get to keep your full state pension even if you inherit £££, and if you have a partner with a high income.

I think pension credit will slowly reduce as more and more are on the new state pension where you need 30 years NI record, many more women work and most self employed people get automatic class 2 credits.

I would think a lot pension credit recipients are older retired women, possibly divorced or widowed, who did not work much and relied on their husband's pension.

It's mind boggling the number of people that think the govt has millions of 'piggybanks' with 'John Smith's NI contributions' written on it. NI is just a flat rate tax which bankrolls the state pension of all current claimants. It is not a pay in - take out savings bank system.

I tend to agree with this. If they just pay anyone over pension age the set amount it would likely mean less admin. You get a full pension no matter what if you’ve paid enough NI. If you haven’t paid enough NI you can get pension credit to the same amount as pension (unless you have significant savings ). If you haven’t paid NI but have a reason why it was paid for you (like getting child benefit or being on universal credit), you can get full pension despite not having worked. Unless they are going to means test the whole thing honestly I think it’s just better to pay a set amount to everyone past retirement age.

Surely PC only helps those with minimal savings and/or income in retirement?
If you have gaps in your NI but some savings and occupational/private pension etc then the amount of PC decreases.