Cut in maximum Savings Pension Credit in April 2012

The government had said that they were going to freeze maximum SPC for four years but this year they’ve cut it instead. As there doesn’t seem to have been any formal announcement about this, other than the figure being included, without special note, in the uprating statement in Hansard, I thought it was worth mentioning.

The reasoning behind this, AFAIK, is only found in the Commons’ Library note, where it says in the introduction:

The Pension Credit standard minimum guarantee is required to be increased at least in line with earnings; the relevant earnings benchmark rose by 2.8%. However, the Government has decided to raise the standard minimum guarantee by 3.9% instead, paying for this by reducing payments on the Pension Credit Savings Credit.

There is a little more detail inside:

Savings Credit
People aged 65 or over who have made some extra provision towards their retirement such as savings or an occupational pension may be entitled to receive Savings Credit if their income is more than the Savings Credit threshold.
The 2006 Pensions White Paper stated that from 2008-09 onwards the Savings Credit threshold would rise in line with earnings.
This year however, in order to fund the 3.9% increase in the minimum income guarantee in 2012-13 (see above), the Savings Credit threshold in Pension Credit has been increased by 8.4%. The single person’s threshold rises from £103.15 to £111.80, while the couple’s threshold rises from £164.55 to £178.35.
In addition to reducing the number of eligible claimants by making the threshold higher, the maximum amount payable through Savings Credit has been reduced – from £20.52 to £18.54 per week for a single person and from £27.09 to £23.73 per week for a couple. (The Government had previously announced in the 2010 Spending Review that the maximum awards would be frozen at the 2010-11 levels of £20.52 and £27.09 until 2014-15.4)

As raising the GPC by more than the earnings link is benefiting the poorer pensioners, I think that it’s reasonably fair but it’s spun of course that the GPC increase is generosity while there no mention of the SPC cut. I’ve even seen the increase in the threshold figure announced as if it’s a good thing.

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50 Responses to Cut in maximum Savings Pension Credit in April 2012

  1. Mrs Pearl Harries says:

    Because of the cuts in our Pension Savings Credit which is paid on my Pension I am going to be £2.25 a week worse off in the year 2012/13. This amount may not seem much but when it is calculated over 52 weeks it is a significant amount to my husband and myself.

  2. George and Doreen Scott says:

    Hi
    Our Pension Savings Credit has been cut by £4.40 a week with no explanation. I phoned the pension dept. and the reply from them were that pensions are increasing in april. I said that you are giving with one hand and taking back with the other, the ladys reply to that was to tell me to speak to my MP, I am 78 and my wife is 73 and the loss of this money means we have to tighten our belts. So I completely agree with Mrs Pearl Harries

  3. R J Kirkham says:

    i’m amazed ! my pension has been increased by £5.35 a week , but my pension credit has been decreased by £2.45 ! ? which means that my pension has only really gone up by £2.94 ! ! a week , how can this be justified ? when as we all know the cost of everything is going up all the time, so much for all the hype about the latest pension increase { £5.35 } being the biggest yet , things don’t really change do they !

  4. R J Kirkham says:

    i aggre with all that has been said !

  5. Mrs Shirley Williams says:

    I too asked why the savings credit amount was being reduced and was also told that I would actually be better off. How ? Savings credit is supposed to be a boost to the basic retirement pension and it is true that benefits are being given with one hand and taken away with the other. I have only been receiving savings credit for 5 months and it was an enormous help. Oh well, it was nice while it lasted !

  6. Gareth Morgan says:

    It’s one of the consequences of the government’s triple guarantee for State Retirement Pension. If that is increased at a greater percentage than Pension Credit, of either sort, then the amount of Pension Credit will be reduced in compensation. Savings Pension Credit is a boost to those who have more than just the basic pension and the government have chosen to reduce it this year in order to increase the Guarantee Pension Credit. If they hadn’t done that then, for many, the retirement pension increase would have largely been swallowed by the means-testing.

    I wish that this had been done transparently at the very least.

    • Pat says:

      The pension guaranteed credit has also gone down so you are wrong

      • Gareth Morgan says:

        I’m often wrong but not this time.
        The rates of Guarantee Pension Credit (GPC) have gone up:

        Standard minimum guarantee

        single person. 2011 rate – £137.35, 2012 rate – £142.70
        couple. 2011 rate – £209.70, 2012 rate – £217.90

        You may though get less GPC if your Retirement Pension and any other pension have gone up more.

        Full State Retirement Pension (SRP) has gone up from £102.15
        to £107.45. That’s an increase of £5.30 a week compared to an increase of £5.35 in GPC. If someone only has SRP as income then their GPC will go up by 5p a week. If however they also have a personal or work pension that’s gone up by more than 5p a week then their GPC will go down because of the means testing.

      • Peter Olbison says:

        Not wrong. My guaranteed pension credit has been reduced since the last two weeks. Down from £142.70 to £137.20. I have had no prior information about this.
        Often wrong and wrong again Gareth.

  7. MIC BAINES says:

    MY SPC WILL GO DOWN AND MY PERSONAL ALLOWANCE ALSO .MY WIFE AND I, I ESTIMATE WILL BE £6-9 A WEEK WORSE OFF IN APRIL.
    IS IT NOT USUAL FOR THE PRESENT LOT! TO TAKE FROM FOLKS, UNABLE TO DO ANYTHING ABOUT IT ?.SOMEBODY PUT THEM IN DID THEY NOT!WHEN YOU PERSONALLY HAVE MILLIONS IN THE BANK WHATS THE ODD FEW POUND LOST. TO WORRY ABOUT WHEN YOU HAVE LITTLE ITS ALOT

  8. my pension credit has been reduced by £3.31 pert week as from april 2012
    whilst every thing is going up ……what a mess up

  9. ann_milligan@ hotmail.com says:

    I AM SO SORRY I EVER SAVED FOR A PENSION. IF I HAD NOT. MY RENT WOULD BE PAID FOR ME AND MY TEETH AND EYE CHARGES WOULD BE COVERED. I HAVE WORKED FOR 40 YEARS AND HAVE A FULL PENSION AND ALSO A SECOND PENSION THAT I FOUND HARD TO PAY FOR AT THE TIME.
    i AM GETTING PENSION SAVINGS CREDIT WHICH DOES NOT ENTITLE ME TO ANYTHING EXCEPT 20P A WEEK
    MY FRIEND WHO NEVER PAID INTO A PENSION FUND AND OPTED OUT OF PAYING NI CONTRIBUTIONS BUT SHE GETS HER RENT PAID HER EYES AND TEETH LOOKED AFTER. HER PENSION BROUGHT UP TO GUARANTEE CREDIT SO I WOULD SAY TO ANYONE DO NOT SAVE FOR ANY THING YOU WILL ONLY LOSE OUT

  10. p read says:

    I too am losing out to the tune of £2.59 a week. It was also reduced last year when the state pension was increased. Apparently we who made some effort in our lives are being penalised in order to fund the increase in the standard Pension Credit payment. I regard this to deceitful and underhand and feel I shall never vote Conservative or Liberal Democrat ever again in my life and I sugest all of you should do the same.

    • Keith Hughes says:

      Not everyone is a nice person like you & I.
      They like to Hit The Poor it makes them feel good. It’s been happening for hundreds of years. Hence Carl Marks & Keir Hardy and others over the generations. Not that they have succeeded in defeating them. The phenominon is indemic in the way humans are made and think. Their biggest fear is that people will find out about them. Hence they do things without other people knowing. Not everyone is a nice person like you & I & not everyone is of your logical mentality.

  11. pauline says:

    I did not realise that this was happening until my husband received his 2012/13 rate for Savings credit. We have lost nearly £5 per week. It seems that Cameron and his cronies(alias Robin Hood and his Merry Men) have decided that its OK to rob pensioners to give to poorer pensioners!! Effectivly, robbing Peter to pay Paul. I am not really surprised that this has been done in such a underhand way-we are talking about this Government after all. They have had their last vote from me.

  12. Rukiaya says:

    My mums pension credit has gone down by £2.25 a week , when everything else is going up in price. Every penny counts! Cameron doesn’t have to worry as he is loaded, doesn’t affect his family. Doesn’t know how people survive on the peanuts that people get.

  13. Derek Walker says:

    We have lost five pounds a week in savings credit yet there is no mention of this in the news tories have lost our vote

  14. Pearl Harries says:

    Thank you, everyone, for your responses to my remarks regarding the Pension Savings Credit. To those who are losing out more than we are I offer my sympathy. Over the past months there has been a significant increase in food, fuel prices at the pumps and just about everything one can think of which costs money. I no longer vote for Party. My husband doesn’t agree with me but I am determined to take a stand on this. I may be just an isolated and insignificant figure in all this but if more people, both pensioners and those approaching retirement, were to make a stand against voting maybe the politicians would begin to show us the respect we deserve.

  15. Valerie Evans says:

    Like the others my Pension savings credit has also been reduced by aprox £3.00 and I was only getting £8.16
    I was a couple but now a single so my PSC has been reduced twice but living costs still continue to rise
    For us the savers having to fund the spenders is disgraceful
    I agree why bother saving the banks we helped no longer help us
    The goverment give us a paltry increase then deduct our benifits so we finish up worse off than we started
    I wonder if Mr Cameron could pay his way on the little he affords the older generation
    So be like the GPC recipients go spend all your savings then you TO can ask for more

  16. frederick says:

    i initially got an increase in my pensions of £7 a week, my savings credit has been reduced by £2 a week this has triggered a reduction in my housing benefit and my council tax, leaving me with an overall increase of £2 a week which doesnt even cover petrol price increases

    • Gareth Morgan says:

      I’m afraid that it’s probably the increase in your pension that has triggered the HB and CTB reduction. If it’s a net increase of £5 a week then that gets treated as extra income for those benefits, if you’re not getting Guaranteed Credit.

  17. Diane Shaw says:

    My husband and I will be almost £5 a week worse off because of this sneaky cut in savings pension credit.
    It doesn’t pay to save,. Spend it all and then claim everything going just like the greedy politicians with their snouts in the trough. If you can’t beat them, join them.

  18. brian dawes says:

    pension gone up 5-30p pension credit gone down 4-40p gain 90p

  19. Paretofp says:

    Dianne although your view seems somewhat cynical, I fear it is the most sensible approach given the current situation regarding pension credit. It is unreasonable to penalise individuals that have invested their money wisely, when those that have been frivolous are now better off.

  20. Jan says:

    Come on peeps – you know us pensioners must suffer so the very rich can have their tax rate cut from 50p to 45p!

  21. Bill White says:

    I would like to apologise to all other pensioners for helping to vote this disgusting greed stricken government into power. I seem to remember them saying that pensioners will be protected in these times of austerity. I wonder if they have as much trouble claiming their expenses as we pensioners have in claiming the benifits we have worked and payed for. Of course, arrogant Cameron and George Osborne are well aware they are in power long enough not to worry about many of us impacted oldies at the next general election. For the record my pension credit was reduced from £19.00 to 14.00 per week, give or take a few pence. When I phoned the Pensions Service they told me I would be so much better off now because, as a couple we would be getting the biggest rise ever of £10.00! That means we got a rise of £5.00, but my Council Tax was calculated on the £10.00 rise so was increased by £2.00, which means we get a rise of £2.00 per week. Well I reckon that will cover the energy, fuel and food increases, don’t you? :-(

  22. Sally says:

    I have read all the comments from letters on here and like you all I have lost over £4 per week regarding the pension credit. I enquired to the pension service about this and was told this was because of the increase in my pension. What a farce!! Totally out of order. Everything has gone up and we end up poorer than before. I shall never ever vote again!!.

  23. Clifford says:

    I too have seen a reduction in my savings pension credit of £2.32 a week.wish i’d sat on my backside all my life a got guarantee pension credit,No council tax,rent paid,free glasses,free dental work,they are the valued members of our society,i have through the internet found the email address of No 10 Downing street & let them know my views.and my local MP.i suggest everyone affected does the same.this government depends on the pensioners vote,i have let them know the’ve lost mine.

  24. Linda Flatt says:

    I have read all the above comments and my mum’s Pension Credit has gone down too. What I don’t understand is how this government think they can justify taking from those who have nothing – increase the State Pension and then take it away by decreasing Pension Credit! . I also don’t know why this slight of hand by the government hasn’t been picked up or exposed more candidly by the media.

    Linda

  25. agnes dawson says:

    This is one of the worst uncaring governments in living memory it hits O.A.P. sick and
    disabled I am 79 I get the state pension and have a small pension from my last employer
    of £107 54 a month, my husband lost his disability allowance as this government has
    changed the goal posts! We are living on my O.A.P. and small pension and my husbands
    pension from his x employer of £316 64 with no help from this lot of millionaires please
    never vote this lot in again don’t listen to their spin about we are all suffering are they?

  26. Peter Olbison says:

    Anyone who saves for a pension has been brain conditioned by the Inland Revenue. They will tell you that being short of NI contributions may affect future benefit entitlements.
    UTTER RUBBISH! Whatever you are short the Government will make up. So don’t despair and have sleepless nights. Know your rights and fight for peace of mind :-)

  27. Gillian Brown says:

    My mum has recently received a letter from the Pension Service which states that her pension credit combined with her state pension is being reduced by £50.28 a week. Surely this can`t be right ? Apparently she has been awared the pension credit savings credit only (£13.10) but is now no longer eligible for the guaranteed credit. My mum is a disabled, 80 year old widow and cannot sustain such a weekly drop in finances. Any helpful suggestions would be much appreciated. Thank you

  28. Gareth Morgan says:

    Gillian

    That sounds a very large cut if it applies to rule or rate changes. Have her circumstances changed in some way?

    • Gillian Brown says:

      Thank you for your reply. No my mum`s circumstances haven`t changed at all but the letter from the Pension Service states that “your pension credit will change. This is because of a change in your circumstances”.
      It goes on to explain that because state pension will be £156.31 and the minimum the Government says you must have each week is £142.70, this leaves a balance of guarantee credit of £0.00 and a savings credit of £13.10. Thus leaving a weekly payment of £169.41 as opposed to what mum was receiving before of £219.44.
      As I said above, mum`s circumstances haven`t changed at all, I really can`t understand what`s happening and how they can justify such a large weekly reduction. Apologies, if I have garbled on a bit !

  29. Gareth Morgan says:

    £142.70 is the current PC Guarantee amount, it goes up to £145.40 in April. It looks as if there’s been, or thought to have been, some recent change.

    This isn’t the place for detailed discussion but if you could get a statement of assessment from the Pension Service then I’d be happy if you emailed it to me for a look.

  30. Gillian Brown says:

    Hi Gareth
    Thanks for your quick response.
    I would be quite happy to forward you the documentation mum received from the Pension Service, will that suffice or do I have to request anything in particular from them ?
    Could I have your email address please, can`t seem to find it on this page.

    Many Thanks

    Gillian

    • Gillian Brown says:

      Just to say a big “Thank You” to Gareth for your help and assistance with my query. Your time and expertise has been much appreciated. Unfortunately, the outcome for my situation wasn`t great but I wouldn`t have been able to understand the complexities of it all without Gareth`s help.

      Regards

      Gillian

  31. sjb says:

    I too paid in extra whilst working and now get four fifths of anything above the pension credit taken off me. They could at least allow say £20 a week because we don’t get all the extra perks like dentist, cold weather payment etc. It really is daylight robbery for those who did work and save for forty years

  32. Mrs Shirley Williams says:

    I commented on this page in March 2012 and feel compelled to do so again. My pension credit started in October 2011, then April 2012 it was reduced by nearly £5. Today I get the news that it is going down again by £1.80 per week. Why encourage pensioners to apply for this “extra income” when each time the State Pension goes up the Pension Credit goes down. I understand that the Government can’t just pay out willy nilly but in time surely I and everybody else won’t be getting any credit at all as our State Pensions increase. Let us help you to get extra money they said. Thanks for nothing I say !

  33. Raphael Simpson says:

    I like all of you am disgruntled by the government actions regarding pension credit. I was self employed most of my life and for a long time was reasonably successful and paid a lot of money into the system over the years. I had no pension provision of my own, mainly because any spare cash went back into business. (my fault). Because of an ill fated business adventure 5 years ago I lost everything, including my house and had to go bankrupt. I now find that I am at the bottom end of the market. I only get state pension and pension credit. My rent and my council tax are paid for me as are my eyes and my teeth. I do feel guilty that I am living on state handouts, so I can feel for those people who have saved all there lives to provide for their pensions. For that I apologise. By the same token I worked hard all my life and never took benefits. But because of decisions that I made, I lost everything that I had worked for. But then I think, what I lost was then diverted back into the system. So others have benefited by what was taken from me. Why then do I still feel guilty and also feel like a scrounger. As to my pension credit and its reduction I can not make head nor tail of it. Sorry to have rambled on but I only want to apologise to all you other good people for being a drain on the system

  34. Stanley Giles says:

    From reading the above it is plain that there are an awfull lot of people being treated in this shamefull way. I too plainly remember the Government stating Pensioner Benifits would be protected, what I cannot find is the Legialation – Regulation that states the DWP can reduce reduce Pension Credit in this manner. There are an awfull lot of us who are being treated in this manner, but is it Lawfull?

    That is what counts, so if any one can point towards the Legislation – Regulation that it is contained in that will be of a great help, it is noted that the matter of Pension Credit is recorded in Hansard. Hansard is not a STATUTE only a record of DEBATES.

    • Gareth Morgan says:

      I’m afraid that it is lawful. There is an uprating order each year which contains the rates of benefit and those can be increases, decreases or they can stay the same.

      What the government promised, when you look at the detail, was to protect only the state retirement pension by linking it to the highest of

      Consumer Price Index
      Earnings
      2.5%

      There is no protection for anything else beyond any policy decisions. Guarantee Pension Credit is linked to earnings by a pensions act but has been increased at a higher rate than that in the last couple of years with the money, latgely, coming from reducing the Savings Credit.

  35. Stanley Giles says:

    Thanks Gareth for your reply, it will be most helpfull if you can give full details of the ORDER I cannot find any details of it in my CPAG handbook only reference is to ‘The Welfare Reform and Pensions Act 1999 (Commencement No.9, Transitional Provisions and Savings) Order 2000 No.2958′ once again many thanks.
    Stanley

  36. Gareth Morgan says:

    Most of the rates were announced in the Autumn Statement 2012 by the Chancellor.

    There are numbers of regulations which contain the uprating details

    Social Security Benefits Up-rating Order 2012 (SI.No.574/2013)

    which opens with

    “The Secretary of State for Work and Pensions has made a review as required by section 150(1) of the Social Security Administration Act 1992(1) and it appeared to the Secretary of State that the general level of prices was greater at the end of the period under review than it was at the beginning of the period.
    The Secretary of State for Work and Pensions has also made a review as required by section 150A(1) of that Act(2) and it appeared to the Secretary of State that the general level of earnings was greater at the end of the period under review than it was at the beginning of the period.
    A draft of this Order was laid before Parliament in accordance with sections 150(2), 150A(2) and 190(1)(a) of that Act, and approved by a resolution of each House.
    The Treasury(3) has consented to the making of this Order.
    Accordingly, the Secretary of State for Work and Pensions in exercise of the powers conferred by sections 150(4), 150A, 151(5) and 189(1), (4) and (5)(6) of the Social Security Administration Act 1992 makes the following Order.”

    Social Security Benefits Up-rating Regulations 2013 (SI.No.599/2013)
    which makes some changes to rates and conditions.

    etc. etc.

    Plus, this time, we had the Welfare Benefits Up-rating Act 2013 c. 16

  37. Stanley Giles says:

    Good morning Gareth, thanks for your reply. It would be most helpfull if you can give full reference of the Order – Regulation – Statement which states by what amount the Pension Credit element will be reduced by. Surely it must exist some where?
    Thanks
    Stanley

  38. Gareth Morgan says:

    You’ll find the new rates in

    2013 No. 574
    SOCIAL SECURITY

    The Social Security Benefits Up-rating Order 2013
    Made – - – - 11th March 2013

    State Pension Credit
    24.—(1) The amounts as specified in the State Pension Credit Regulations shall be the amounts
    set out in this article and Schedule 13 to this Order; and unless stated otherwise, any reference in
    this article to a numbered Schedule is a reference to the Schedule to the State Pension Credit
    Regulations bearing that number.
    (2) In regulation 6(b) (amount of the guarantee credit)—
    (a) in paragraph (1)(a) for “£217.90” substitute “£222.05”;
    (b) in paragraph (1)(b) for “£142.70” substitute “£145.40”;
    (c) in paragraph (5)(a) for “£58.20” substitute “£59.50”;
    (d) in paragraph (5)(b) for “£116.40” substitute “£119.00”; and
    (e) in paragraph (8) for “£32.60” substitute “£33.30”.
    (3) In regulation 7(c) (savings credit)—
    (a) in paragraph (1) “60 per cent.”, “60 per cent.” and “40 per cent.” in sub-paragraphs (a), (b) and (c) respectively remain unchanged; and
    (b) in paragraph (2) for “£111.80” and “£178.35” substitute “£115.30” and “£183.90”
    respectively.

  39. val says:

    I am just about to receive my state pension for the first time at 61.5 ( I am appealling the figures as I think they should be a little bit higher, but that is another story ). I read that if I have some savings when I reach 65 I will be able to claim ‘savings credit’ which may boost my pension by a few pounds. When I was reading the above information, am I correct in reading that I will have to pay rent, council tax, dental care and glasses if I claim ‘savings credit’. I will also have to pay them if I have a ‘private pension’ which will pay me £4.05 per week.
    I would appreciate if someone let me know the answer.

  40. Gareth Morgan says:

    You may still be entitled to means tested benefits such as the guaranteed credit, housing benefit or council tax support even with the state pension, savings credit or occupational or private pension. That means that you may also be entitled to free prescriptions, dental care etc.

    You should check with a local advisor.

  41. Angela Holmes says:

    We have lost our pension savings credit £1.96 and also most of our help for rent and rates so we are now £200 plus a month worse off. I didn’t realise Council rebates were dependent on recieving some form of Pension Credit.

  42. Gareth Morgan says:

    Council Tax Reduction (CTR) is not dependant on receiving some form of Pension Credit (PC), you can get it without getting any PC. What Guarantee PC (GPC) does, if received, is to automatically make a rebate of the full eligible Council Tax amount. Have you made a formal claim for CTR? If you no longer get it automatically because you don’t receive GPC then check that you have claimed it. Savings Pension Credit (SPC) doesn’t get CTR automatically and a reduction of £1.96 SPC should actually increase your CTR entitlement by 39p a week.

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