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Mixed-age couples face pensions raid

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28/02/2019
The Government has published an impact assessment following its decision to strip mixed-age couples of the right to claim Pension Credit.

Previously mixed age couples could transition from working age benefits to pension age benefits when the older partner reached state pension age. The Department for Work and Pensions has said from 15 May 2019, the transition will happen only when the younger partner reaches State Pension age, currently 65 for men and women.

Pension experts have warned that the change in eligibility could leave some couples more than £7,000 a year worse off because the rate of pension credit is typically higher than working-age benefits. At the same time, there is a risk of a ‘cliff edge’ on 15 May, depending on when people retire.

Couples where one partner is over pension age and is not expected to seek work will get the same rate as a couple where both partners are under pension age and both are expected to seek work.

Tom Selby, senior analyst at AJ Bell, said: “Tens of thousands of mixed-age couples are facing a £1 billion hit as a result of the Government’s Pension Credit raid.

“With Pension Credit worth up to £13,273 a year versus £5,986 a year for Universal Credit, at the extreme those affected could be over £7,000 a year worse-off as a result. While policymakers can reasonably argue this change has been in the offing since the Welfare Reform Act 2012, that will be little solace to those affected who face a potentially significant retirement income shortfall.

“Anyone who thinks they might be impacted should act now to claim Pension Credit while they still can.”

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