Pension credit getter than state pension

[Asosbabe]

£218.50 pension credit a week plus £300 winter fuel payment works out more than full state pension £221.20. AIBU to think it should be means tested properly if they're going to do it. Someone who has paid national insuance for 35 years will be worse off than someone who hasn't paid in at all

Don't forget the free TV licence.

Is that pension credit on top of the state pension?

And reduced or free Council Has

Pension credit is not on top of full state pension

Because I've just looked it up on the government website and it says:

What you'll get
Pension Credit tops up:
your weekly income to £218.15 if you’re single

Not that it gives you that on top of your pension.

trouble with all these things us there will always be a cut off, but I thought pension credit rules were more complicated than this - so someone could end up with a small amount of PC and then qualify for the other benefits. What are you driving at OP?

If you are on pension credit yes you get topped up to £218 a week plus you will get wfp of £300 equivalent to an extra £6 a week taking your income up to £224 a week when someone on just state pension will get £221 so effectively now worse off.

Pension credit is means tested and applies to those on low incomes.

www.gov.uk/pension-credit

Winter fuel allowance is not means tested.

You're right, for someone with no private pension at all, they will end up substantially better off by not getting a full state pension and so being entitled to a bit of pension credit top up

The problem with means testing a benefit is that sometimes the cost associated with fair and accurate means testing (gathering and checking the info, tracking down anyone trying to cheat the system etc) can cost so much that it makes more sense to use a broad brush approach.

I think you missed Labour's announcement.

Pension credit takes your income up to £218.50 i.e. £11,362 per year. Add on £300 winter fuel payment, that's £11,662 per year.

If you only get the full state pension, that's £11,205.40 per year.

Labour announced making the winter fuel payment means tested yesterday. It will now only be given those on pension credit or other means tested benefits

There's no point in exercising basic fiscal prudence, is there?

I did, indeed, miss that announcement.

Let's see if it happens!

How many pensioners are there that get just the state pension and no other means tested benefit at all. A small group surely?

There is precedent for this. People on pension credit also get the Warm Home Discount from their electricity provider.

Good question. It may be very few people but there are bound to be some

@TheThingIsYeah I mean there is - being reliant just on either pension credit or the state pension sucks, they are both tiny. The icentive is to get a private or workplace pension and pay as much as you can in.

That assumes that both individuals have absolutely no other source of income.

The OP may be right that such a comparison results in those receiving the absolute maximum of pension credit getting more than those receiving the absolute minimum of pension (ie state pension only). But with the numbers being that close, as soon as you introduce any other funds into the equation (eg occupational pension) their positions would reverse.

As always with these things, people try to make general points by cherry picking individual cases.

Until that gets raided. Or they'll look at you at retirement age and go, "Ah, Mrs GinMonkey, we see you have a private pension that you diligently paid AVCs into for years. You won't be getting a state pension" I can see that happening.

Indeed and you can also hold as much property, savings as you like.. and still get the full state pension not so with pension credit where the limit is £10k savings.

@TheThingIsYeah I think my generation are pretty much resigned to the real possibility of the state pension being means tested at some point 🤷‍♀️ we've been shat on every other way - housing, private pensions, education costs.

My view is you should never factor state benfits (which is what the state pension is) in to your long term financial planning - it can all be changed at the stroke of a pen.

As always with these things, people try to make general points by cherry picking individual cases

Exactly. The number of people who only get state pension but no other income from a private/workplace pension and won't be entitled to pension credit or other help at all will be very very small.

There's always the possibility of a small number of cases that are worse off, but I think broadly the decision to restrict winter fuel payments to those on pension credit is a good one. Many pensioners are comparatively wealthy compared to the working age population if not in terms of income, in terms of assets so don't need extra financial assistance like this.

The other point is that many people who are entitled to pension credit haven't bothered to claim it, so always worth looking at as, even if the PC award is small, it's a gateway benefit to significant extra help, so worth claiming.

@Ginmonkeyagain

My view is you should never factor state benfits (which is what the state pension is) in to your long term financial planning - it can all be changed at the stroke of a pen.

Agreed.

I can't find figures later than 2017, but of all those reaching retirement age in that year, one in seven would be relying solely on the state pension.

In that year, 19% of women were retiring without a private pension. Factors in that include having no access to a workplace pension and working part-time and/or in low-paying jobs and therefore not being able to afford contributions.