Pension credit lags state pension increase as Govt publishes benefits tables

The poorest pensioners will get the smallest increases in benefits from next April as pension credit increases by 2.3 per cent while state pension increases by 3 per cent under the triple lock, the Government has confirmed.

Publishing next year’s benefit allowances and rates, the Government has confirmed that benefit cap levels will be frozen, meaning real term reductions in overall benefits for some households.

The rate of the state pension for new pensioners will rise by £4.80 from £159.55 to £164.35, an increase of 3 per cent. The rate of pension credit will rise by just £3.65, from £159.35 to £163, an increase of 2.3 per cent because the benefit only increases in line with the growth in average earnings.

In previous years, governments have found extra money within the benefits system to make sure the poorest pensioners got the same rise as their better off counterparts says Royal London director of policy Steve Webb, but have not done so this year.

Webb says: “It is surprising that the government has decided to give the poorest pensioners the smallest increase. For those on pension credit, the rise is below the rate of inflation, which will create a squeeze on the living standards of the poorest pensioners. By contrast, better off pensioners will get a full inflation-linked increase. For many years pensioner poverty has been falling and it would be worrying if that progress were to be reversed because of decisions like this.”