Mixed-age couples face £1 billion hit from Government Pension Credit raid

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. 

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:


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. 

This article was originally written by our sister publication Moneywise.

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