The Department for Work and Pensions (DWP) is sending an important leaflet to all 11 million state pension recipients in the coming weeks. Many pensioners may be missing out on an extra £3,900 a year. State pension rates are rising by 4.1% in April, following the triple lock.
The DWP wants pensioners to check if they can get more money. Pensions minister Torsten Bell said in response to a question in Parliament:
“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.”
Hundreds of thousands of households are not claiming Pension Credit, even though the Government has tried to get more people to apply. On average, each claim could mean an extra £3,900 a year.
Pension Credit tops up weekly income to £218.15 for single people and £332.95 for couples. Extra amounts can be added based on personal circumstances, like caring duties. People who get Pension Credit can also get other help from the Government, like a free TV licence if they are over 75, help with some costs, and the Winter Fuel Payment.
Pension Credit will go up by 1.7% in April, along with other benefit rates. This will raise the income top-up to £227.10 a week for single pensioners and £346.60 for couples. Mr.
DWP urges pensioners to claim benefits
Bell said the coming increases will mean “an increase in both cash and real terms” for those who can get Pension Credit. People who have reached state pension age and live in England, Scotland or Wales can apply for Pension Credit. They can start the application process up to four months before they reach state pension age.
The state pension will go up by 4.1% from April. The full new state pension will rise from £221.20 a week to £230.25 a week. The full basic state pension will go up from £169.50 a week to £176.45 a week.
To get the full new state pension, people usually need 35 years of National Insurance contributions. For the full basic amount, 30 years of contributions are needed. With public spending under pressure, many money experts think the current triple lock may need to change in the future.
Steven Cameron, pensions director at Aegon, has suggested a possible alternative:
“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 reason for this idea, 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.”
