Thousands of older mixed-aged couples could lose out on over £6,000 after government pension benefit raid

28 February 2019

Older couples of differing ages could be in line to lose out on thousands of pounds a year in retirement benefits thanks to changes being implemented by the Department for Work and Pensions (DWP).

Moneywise first reported on 15 January that some couples could lose out on up to £7,000 a year in benefit payments.

Now, the government has published its ‘impact assessment’ of the benefit change and found it stands to save up to £1 billion over the next five years due to the overhaul.

The government’s own data says up to 15,000 couples will be affected after the change is implemented on 15 May this year. The years after affect the following numbers:

Number of couples affected:15,00030,00040,00050,00060,000
Source: Department for Work and Pensions (DWP) policy modelling based on Budget 2018 caseload and spending estimates. Numbers rounded to nearest 5,000.

The report notes however that these figures are subject to change “following Spring Statement 2019 on 13 March.”

Comparing these numbers against the annual savings the government will make suggests couples will lose out on an average of around £6,400 per year. 

Under current rules married couples are able to transition from working age to pension age benefits as soon as the oldest spouse reaches state pension age.

However, from 15th May this year the couple will only be able to transition once the youngest of the pair reaches state pension age.

The move will impact benefits including pension age housing benefit, universal credit and pension credit.

The DWP says that the change would ensure that younger people do not get additional benefits as a result of having an older partner.

Tom Selby, senior analyst at AJ Bell, comments: “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.”

This example is based on a couple receiving 2019 pension credit maximum of £255.25 per week, versus the alternative of a standard universal credit payment of £498.89 a month.

Mr Selby adds: “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.”

Moneywise approached the DWP for comment. A DWP spokesperson says: “This change was voted on by Parliament in 2012 and means, for new claims from 15 May, only pensioners can claim Pension Credit.

"If a person in the household is of working age we believe it’s fair that they should be in the same circumstances as other people of the same age, regardless of the age of their partner. 

“We are writing to all current mixed age couples to make sure they are aware of the change in policy.”

The DWP also stresses that the change does not affect state pension payments. Where the couple are claiming universal credit, the pensioner will not be subject to work-related conditionality. 


In reply to by anonymous_stub (not verified)

I would have thought the pittance of a state pension is low enough already!!, lowest in Europe, I believe, without this awful government stealing more of it.I bet this will not affect those grossly overpaid MPs!!.

In reply to by anonymous_stub (not verified)

Not only am I a victim of the pension fraud ,as a Windrush as we call it ,Victim ( Canadian ) born I am also a victim of the Immigration debacle after living in this country since 1956 and working since I was 15 years old ,I was stopped from working at the age of 65 and lost my earnings and my job .I have worked all my life and I had a right to stay but now .I have no savings and a huge solicitors bill paid to sort this mess out .14 months of stress and worry . Fine upstanding citizen ,tax payer ,looked after my parent and in laws Did everything right . Treated like this and we are many . The government believe we are there to pay for their mistakes and the working people are the only ones they can grab money back from .The laws and the immigration situation is all designed so that all the money paid into pensions ect .Is not going to be paid out .Result ,Shafted .

In reply to by anonymous_stub (not verified)

There is no 'youngest' of a couple, only the younger!

In reply to by Alan Plater (not verified)

There is a hidden agenda you know!

In reply to by anonymous_stub (not verified)

So, theoretically those who I presume would not have been signing on as unemployed due their younger spouse being able to claim Pension credit, will then have to sign on as unemployed. If this is correct that's going to make the unemployment numbers jump significantly, almost over night ! But of course, that will not effect me as we are no longer residents in the UK, I still have 3 years to wait before my pension at 66, and have not been able to claim a bean for 13 years we have been away, savings and wifes basic pension we have been on all this time. At this time, with huge price rises everywhere and the pound exchange rate bouncing off the seafloor for the past 2 years it's very hard to financially keep going.

In reply to by anonymous_stub (not verified)

I would like to have information about monetise newsletter.

In reply to by anonymous_stub (not verified)

Surely the item you have announced about Pensions, if couples are different ages, is a form of age discrimination.

In reply to by anonymous_stub (not verified)

What is it with this TORY government they must get a kick out of putting people down,yet you have the likes of Chris Grayling wasting millions of pounds due to his incompetence of running a department or departments that a child of 3 could do better,the man is a walking disaster and its the taxpayer who gets it in the neck because of idiots like that.The plonker should be SACKED ASAP.The sooner we get rid of this TORY MONEY GRABBERS the better for the innocent people who fall fowl of this shower.

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