Low-income state pensioners may not benefit from triple increase in benefit payments | Personal finance | Finance


Older people on low incomes can apply for a pension credit through the Department for Work and Pensions. Thanks to the triple lock, state pensions are increased either by the rate of inflation, or by the average wage, or by 2.5%; whichever is the highest. However, the pension credit does not get a payout increase similar to that of a triple lock as it stands.

Currently, state pensioners eligible for pension credit see their weekly income increased to up to £182.60 if they are single.

If they have a partner, which includes spouses and civil partners, their joint weekly income is increased to £278.70.

Additional amounts may be granted to pension credit claimants if they are responsible for caring for young children or a disabled person.

Pensioners are also due to receive an additional £300 cost of living payment to help cope with soaring bills this winter.

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If the triple-lock commitment were to remain in place, state pension payments would increase by 10.1%.

This would be in line with inflation and would result in an increase of £200 per week from April 2023.

However, the amount of other benefits that will be increased by next year remains to be confirmed.

Tom Selby, head of pension policy at AJ Bell, explained why those who get a pension credit may not receive a similar boost.


Mr Selby explained: “The good news for those in receipt of a state pension ‘protected payment’ or additional state pension rights is that the legislation requires the government to increase these benefits according to the inflation.

“Given inflation in September is pretty much nailed above incomes or at 2.5%, they should see all of their state benefits increase in line with prices.

“However, what happens to the more than 1.4 million people on pension credit – among society’s poorest retirees – is less clear.

“The legislation only requires the government to revalue the central element of the pension credit – the ‘standard minimum guarantee’ – in line with average income growth.

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“Based on average earnings growth in the three months to July, this implies that collateral credit will increase by 5.5 PE.

“Other elements of pension credit, including savings credit and additional top-ups for carers and severely disabled people, do not have a built-in increase.”

It should be noted that the government has yet to reiterate its support for the triple lockdown of state pensions following the appointment of Prime Minister Rishi Sunak to the country’s highest office.

According to Mr Selby, an increase in the payment of benefits is due to be implemented next year, but the rate at which it will increase is unknown.

He added: ‘That doesn’t mean there can’t be an increase – or an increase above earnings in the case of the standard minimum guarantee – but it does mean it’s at the government’s discretion.

“For the increase applied this year, for example, temporary legislation created as part of the decision to remove the income element of the triple lock for one year saw all pension credit elements increase by 3.1% , as per September 2021 CPI. inflation figure. This legislation falls for next year’s increase.

“Given that the pension credit is paid to the lowest earning pensioners in the UK, it would cause an outcry if they did not receive the same inflation protection as those receiving the state pension.

“Uncertainty about this no doubt worries many people, especially in the wake of recent energy price hikes.

“The government has the power to allay the concerns of millions of people by setting out exactly what increases will be applied next year.”

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Elaine R. Knight