State Pension & Savings Credit

viv0147

Why is it when my state pension goes up my pension savings credit goes down, so in affect my pension increase is only £1.20! At the moment I have £159.11 single mans pension because of my contributions, and £12.50 pension savings credit total £171.61. From April 2015 my pension will be £162.51+ £10.30 pension savings credit total £172.81 Why? it just doesn't seem fair.

xylophone

The idea is for most help to go to the poorest.

See https://www.gov.uk/government/news/double-inflation-boost-for-state-pension-with-additional-help-to-the-poorest

"The cost of the measure to raise the standard minimum guarantee for Pension Credit will be offset by an increase in the Savings Credit threshold of 5.1%."

xylophone

And http://pensionsandsavings.com/uk-economy-and-economic-policy/my-comments-on-the-autumn-statement/

"Part of the extra cost of uprating the Pension Credit Guarantee level will be recouped from pensioners with savings, as the Savings Credit threshold will be increased by 5.1%, so the poorest pensioners who have some savings will lose out on some extra income. Savings credit gives extra money to people who have saved, but you only receive this credit if your income is above the Savings Credit threshold of £120.35 a week for a single person). The Savings Credit threshold will be increased by 5.1%, so more people will fall below the new threshold and lose out on savings credit income. For every £1 by which your income exceeds the threshold, the Government pays you 60p, but this is one of the most complex calculations and most people simply do not understand it. The maximum savings credit anyone can get is £16-80 a week and many of those entitled never actually claim because it is so complicated. Nevertheless, some people will lose out when the Savings Credit is increased."