The Department for Work and Pensions (DWP) is set to send out a key leaflet to all 11 million state pension recipients in the coming weeks, as it’s estimated a large number could be missing out on an additional £3,900 annually. With state pension rates increasing by 4.1 percent in April, in line with the triple lock policy, the department aims to prompt pensioners to verify their eligibility for extra funds.
Responding to a parliamentary question, Pensions minister Torsten Bell stated: “Over the coming weeks, as part of the annual state pension uprating exercise, around 11 million pensioners will receive a leaflet promoting Pension Credit along with their state pension uprating letter.”
It’s believed that hundreds of thousands of households may not be claiming Pension Credit despite the Government’s recent drives to boost uptake. On average, eligible pensioners could enjoy an increase of up to £3,900 in income per year.
Pension Credit helps top up weekly incomes to £218.15 for single pensioners and £332.95 for couples. There are also additional sums available depending on individual situations, such as caring responsibilities.
Pension Credit claimants not only receive the basic income top-up but are also privy to a range of additional government aides, such as a free TV licence for those aged over 75, NHS fee assistance, and entitlement to the Winter Fuel Payment. From April, due to the scheduled benefit rate changes, they will witness a 1.7 percent rise, boosting the weekly Pension Credit to £227.10 for single pensioners, with couples receiving £346.60, reports the Manchester Evening News.
Mr Bell pointed out that the upcoming raise marks “an increase in both cash and real terms” for Pension Credit beneficiaries. Those at the state pension age living in England, Scotland, or Wales are eligible for Pension Credit applications up to four months before reaching the required age.
The state pension itself is set to surge by 4.1 percent come April, propelling the full new state pension from a weekly £221.20 to £230.25, while the full basic state pension climbs from £169.50 to £176.45 per week. To be considered for the full new state pension one typically requires 35 years of National Insurance contributions, with 30 years needed to gain the full basic state pension amount.
Several finance specialists think the triple lock may soon require revising due to pressure on public spending. As an alternative, Steven Cameron, Aegon’s pensions director, proposed implementing some smoothing over time: “Rather than increases each year being the highest of earnings growth, inflation or 2.5%, some smoothing could be introduced over time.”
“Pensioners would receive an inflation increase as a minimum, and if over the previous three years wage growth has on average been higher than inflation, they’d get an extra uplift.
He explained the rationale for this metric, saying: “This avoids widely fluctuating outcomes at times when both inflation and earnings growth are unpredictable, smoothing things out but ensuring pensioners still share in sustained increases in the nation’s wealth.”