Pensions 'savings credit'

MOUNTY

Please can someone explain in simple terms what this means. I understand that it is a form of bonus for having saved for retirement by means of personal pension to put along side your state pension. Confused as i believe not everyone receives it?

yelf

it'll probably disappear next month anyway

anmarj

Savings Credit – Age 65 or over

If you are aged 65 or over and living in the UK you may be entitled to Savings Credit. You may get the Savings Credit on its own or with the Guarantee Credit. You may be entitled to Savings Credit if you:

• are aged 65 or over
• have made some provision towards your retirement such as savings or a second pension
• If you have a partner, at least one of you must be 65 or over to get the Savings Credit.The Savings Credit can be up to:
  • £20.54 a week if you are single
  • £27.09 a week if you have a partner
  You may still get the Savings Credit even if the money you have coming in is up to about:
  
  • £184 a week if you are single
  • £270 a week if you have a partner
  These amounts may be more if you are disabled, have caring responsibilities or certain housing costs, such as mortgage interest payments.

this gives it in simple terms, there are five benefits which do not come under qualifing income - JSA (Conts), ESA (conts), Incapacity benefit, Severe disablement allowance, working tax credit and spousal maintenance

hugheskevi

The first thing to understand is that it is simply a means-tested benefit, don't get hung up on the name.

The ultra-simple definition: If your income before Pension Credit and other means-tested benefits is between £100 and £180 p/w (for a single person) you get a bit of extra money. It has nothing to do with personal pensions specifically, any pension income, including SERPS/State Second Pension, qualifies.

The more detailed version:

If your income before means-testing is under about £100, you simply get topped up to £132.60 and that is it.

If your income is a bit over £100, you get 60% of the amount by which it is over £100. It is this 60% slice which is called the Saving Reward.

The idea is that you are not penalised £ for £ for saving and having income slightly above the Basic State Pension. Instead, you are only penalised 40p in the £, or rewarded 60p in the £ as the Government prefers to put it.

The maximum reward occurs if your income is exactly equal to the Guarantee Credit (£132.60). After this point the Saving Credit reduces, such that at about £180 per week of income you are not entitled to it (assuming you are single, and don't receive any premiums).

MOUNTY

hugheskevi wrote: »

The first thing to understand is that it is simply a means-tested benefit, don't get hung up on the name.

The ultra-simple definition: If your income before Pension Credit and other means-tested benefits is between £100 and £180 p/w (for a single person) you get a bit of extra money. It has nothing to do with personal pensions specifically, any pension income, including SERPS/State Second Pension, qualifies.

The more detailed version:

If your income before means-testing is under about £100, you simply get topped up to £132.60 and that is it.

If your income is a bit over £100, you get 60% of the amount by which it is over £100. It is this 60% slice which is called the Saving Reward.

The idea is that you are not penalised £ for £ for saving and having income slightly above the Basic State Pension. Instead, you are only penalised 40p in the £, or rewarded 60p in the £ as the Government prefers to put it.

The maximum reward occurs if your income is exactly equal to the Guarantee Credit (£132.60). After this point the Saving Credit reduces, such that at about £180 per week of income you are not entitled to it (assuming you are single, and don't receive any premiums).

My mother recieves £78 state pension, she stills works apprx £ 5400 net pa, recieved £12k from works pension which she took full payment. Married to dad who recieves full state pension plus army pension. I presume she is not entitled then?:(

hugheskevi

From what you say, I think it would be unlikely.

You might want to have a look at Council Tax Benefit and Attendance Allowance/Disability Living Allowance - those are the benefits a lot of pensioners who are eligible don't claim. Even if they are not relevant now, they may be in the future.