Why has my Pension Credit gone down?

Gardenut

I have just received a letter this morning to say my new rate of Pension Credit from April 11 2016 will be £15.37. I already get £16.70. I am 67 years old and I thought all benefits for pensioners were covered by the triple lock. I have no income apart from my state pension and the pension credit, and struggle to pay my bills at it is. How can they reduce this benefit?

Pollycat

Could it be because your state pension amount has gone up from April?

My Mum received a letter saying her State Pension will increase (by a pretty small amount) but I reminded her that she usually gets a letter saying her pension credit (savings element) has gone down so she's no better off.

margaretclare

That's the explanation.

State pension goes up every year, is not means-tested.

Pension credit IS means-tested, so if the rest of your income goes up, PC will go down.

Gardenut

Thank you for your replies. That really doesn't seem fair when my state pension/pension credit is my only income. I'll be giving them a ring on Monday to find out.

Pollycat

From Gov.UK:

Pension Credit is an income-related benefit made up of 2 parts - Guarantee Credit and Savings Credit.


Guarantee Credit tops up your weekly income if it’s below £151.20 (for single people) or £230.85 (for couples).

Savings Credit is an extra payment for people who saved some money towards their retirement, eg a pension.

So - fair or not - your total income (i.e. state pension plus credit credit) is capped at a certain amount per week.
If your pension goes up, your pension credit goes down to put you at the capped level.

margaretclare

Pollycat wrote: »

From Gov.UK:

So - fair or not - your total income (i.e. state pension plus credit credit) is capped at a certain amount per week.
If your pension goes up, your pension credit goes down to put you at the capped level.

Isn't there something to the effect 'what the government says you need to live on'?

Is that the 'capped level'?

Mojisola

Pollycat wrote: »

So - fair or not - your total income (i.e. state pension plus credit credit) is capped at a certain amount per week.

If your pension goes up, your pension credit goes down to put you at the capped level.

I don't understand why the PC rate doesn't go up each year by the same percentage as the SP.

If the PC rate doesn't go up, anyone relying it has to cope with a year-on-year reduction in their income.

Pollycat

margaretclare wrote: »

Isn't there something to the effect 'what the government says you need to live on'?

Is that the 'capped level'?

I'm pretty sure it used to say something like that on GOV.UK website but I can't see it now.

As the extract from GOV.UK says, a single person should have £151.20 pw to live on and a married couple £230.85 pw.
So yes, those amounts are the 'capped level' depending on the OP's marital circumstances.

McKneff

Do you get other benefits ie council tax reduction, housing benefit etc

Pollycat

Mojisola wrote: »

I don't understand why the PC rate doesn't go up each year by the same percentage as the SP.

If the PC rate doesn't go up, anyone relying it has to cope with a year-on-year reduction in their income.

I don't understand it either but I don't make the rules.

Do the Government increase the 'amount you should have to live on' year on year?

It does seem unfair to me that they should give you more money with one hand and take it away with the other.
It's something that my Mum has experienced for a number of years.

In fact, her pension credit (savings) award dropped so low that they stopped paying it weekly.

Linton

Mojisola wrote: »

I don't understand why the PC rate doesn't go up each year by the same percentage as the SP.

If the PC rate doesn't go up, anyone relying it has to cope with a year-on-year reduction in their income.

Perhaps because the SP is going up by more than inflation whereas the PC criterion is presumably only increasing with inflation. So it wouldnt be a year-on year reduction in income, in real terms their income would remain the same.