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Pensioners with younger partners are currently missing out on nearly £10,000 a year due to changes to benefit rules, according to analysis by . I.
The government (and Labor if it comes to power) is being asked to reform the pension system again to support older people who are struggling financially.
charity uk age It said some older people were facing “real hardship” amid the cost of living crisis as they were unable to access benefits meant to boost incomes for the most vulnerable pensioners.
An estimated 60,000 mixed-age couples – where one person is of state pension age and the other is not – will no longer be eligible for pension benefits after a 2019 rule change by the Department for Work and Pensions (DWP). .
The charity called for a rethink of the policy, saying it was “clearly wrong” to penalize impoverished pensioners just because they have a spouse who is younger than them.
IThe analysis, backed by Age UK and independent pension experts, shows that mixed-age couples are currently missing out on benefit payments of around £9,900 a year.
Since changes to the system in 2019, mixed-age couples struggling financially have had to claim Universal Credit, which is hundreds of pounds less each month than Pension Credit.
Pension Credit can top up a couple’s weekly income by up to £332.95 if they’re both of state pension age.
In comparison, couples are only eligible to receive up to £617.60 a month, or around £150 a week, by claiming Universal Credit.
The difference means that at current rates, mixed-age couples are up to £9,902 a year worse off than their previous arrangements in which they could claim pension credits.
Caroline Abrahams, director of Age UK, said: “The mixed-age couple rule was introduced nearly five years ago, but it continues to cause serious difficulties for those affected.”
“It is patently untrue that a couple where one person is a pensioner and the other is under state pension age would be much better off financially overall if they divorced or separated.”
Mr Abrahams called on all political parties to commit to changes to pension credit rules as they prepare their manifestos for the general election expected in the autumn.
“The time has come to revisit the policy and we hope this will be on the next administration’s agenda.”
Campaigners also pointed out that some young partners of pensioners are unable to work due to their own health problems or full-time caring responsibilities for their spouses.
Former Conservative pensions minister Baroness Ross Altman has urged both major political parties to consider widening access to pension credits to include mixed-age couples.
“As the national pension age continues to rise, I believe it will be fairer for people in their 60s who need a pension to continue to receive means-tested support.”
Baroness Altmann added: “In a country where half the population cannot maintain good health past their early or mid-60s, restricting pension benefits for older people is a serious challenge for those with low incomes and without private pensions or savings.” It would be a disservice to everyone,” he added.
Liberal Democrat work and pensions spokeswoman Wendy Chamberlain also said it was time to review access to pension credits.
“These measures, which make pensioners even more financially vulnerable, should clearly be reviewed. Pensioners are pushed into poverty because they are often dependent on pension payments, which are beyond their control. There is a greater risk that the condition will fall and remain in that condition.”
SNP frontbencher Chris Stevens said both major parties should commit to reversing the 2019 changes to their manifestos. “We need to see changes in this system that empower older people and help lift them out of poverty.”
Mixed-age couples who were eligible for a pension before the 2019 system changes were able to continue receiving the pension unless their circumstances changed.
Helen Morrissey, head of retirement analysis at financial services firm Hargreaves Lansdown, said couples “need to be careful” that changes in their circumstances did not invalidate their claim for pension credits.
“The gap between two merits” [pension credit and universal credit] The scale is huge, and the change between the two can put a huge strain on people’s budgets. ”
Senior Labor MPs had previously criticized the 2019 rule changes. Last year, Labour’s Matt Rodda, then shadow minister for pensions, urged the government to change its “draconian and unnecessary policies”.
However, Labor declined to comment in response to questions from the Labor Party about its new demand for pension benefits to be extended to couples of different ages. I About the approach to profit.
In 2019, the government estimated that 60,000 previously eligible couples would no longer be able to access pension credits by 2023/24 as a result of rule changes.
Ministers argued that the changes would: Providing better “work incentives” for pensioners’ younger partners.
The DWP states: “Pension schemes provide long-term support to pensioner households that are no longer economically active due to age.
“This policy ensures that if one member of a couple is of working age, the law applies to them in the same way as other people of working age, regardless of whether their partner is older, It gives them an incentive to work and save for retirement as well.”