Retirees at risk of £3,500 state pension loss

Up to 11,000 retirees could lose thousands in basic state pension income a year when the addition for adult dependents is abolished in April.

The benefit is typically paid on behalf of spouses who are below state pension age but are financially dependent on a basic state pension recipient.

It was scrapped for new claimants from 2010, as a result of legislation in the 2007 Pensions Act, but transition arrangements enabled existing claimants to carry on receiving the benefit for a further 10 years.

The total loss of its removal will be around £33m and see individuals losing as much as £70 a week.

The numbers are the result of a freedom of information request from Steve Webb, policy director at Royal London.

Commenting he says: “Under the old state pension system, people claiming a retirement pension could get a significant extra amount for a spouse who was financially dependent upon them.  Although that addition was abolished for new claims in 2010, many people already in the system have continued to benefit.

“It will come as a nasty shock to thousands of people to see their state pension cut by up to £70 per week.  It seems penny-pinching of the government to take this money away when the addition is gradually working its way out of the system in any case.  Losing over £3,500 per year over night will make a material difference to the standard of living of those who are affected.”

He adds: “For those with a very low income as a result of this change, it may be possible to claim a top-up through the universal credit scheme, though this would probably mean the younger partner being expected to look for work.”

This article was first written by our sister magazine Moneywise.

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