The Emergency Budget will cause the number of pensioners eligible for means testing to reduce and gradually narrow the gap between the full Basic State Pension and the Pension Credit, according to Ros Altmann, pension consultant.
The current £97.65 basic state pension will be increased from next year by the higher of price inflation, earnings inflation or 2.5 per cent. But
Pension Credit will gradually become less generous, as it will only be increased by the same cash rise as the full basic State Pension.
Altmann says: “These measures may suggest some subtle changes in the state pension which may suggest a different direction of travel in future. By raising pension credit only by the same cash amount as the increase in Basic State Pension next year, the Government will be reducing the gap between the National Insurance pension and the means-tested Pension Credit.