DWP to send out £3,900 letter to all state pensioners
The Department for Work and Pensions (DWP) is set to dispatch an important leaflet to all 11 million state pension recipients in the upcoming weeks, as a significant number may be foregoing an additional £3,900 a year.
With state pension rates rising by 4.1 percent come April in adherence to the triple lock, the department is seizing the opportunity to urge pensioners to check if they can get additional funds. Pensions minister Torsten Bell revealed in response to a parliamentary enquiry: "Over the coming weeks, as part of the annual state pension uprating exercise, around 11 million pensioners will receive a leaflet promoting Pension Credit along with their state pension uprating letter."
It's believed that hundreds of thousands of households are not claiming Pension Credit, despite recent Government efforts to encourage applications. On average, each claim could mean an annual boost of £3,900 worth of extra income.
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Pension Credit serves as a supplement to your income, increasing weekly income to £218.15 for individuals and £332.95 for couples. Additional amounts can be added to this based on personal circumstances, such as if you have caring responsibilities.
Claimants of Pension Credit also gain access to a suite of additional governmental support, including a free TV licence for those aged over 75, contributions towards NHS costs, and entitlement to the Winter Fuel Payment. In line with benefit rate adjustments scheduled for April, amounts will see a 1.7 percent increase, taking the Pension Credit income top-up to £227.10 per week for single pensioners and £346.60 for couples.
In his remarks, Mr Bell highlighted that the upcoming increases will signal "an increase in both cash and real terms" for those entitled to Pension Credit. People of state pension age residing in England, Scotland, or Wales can apply for Pension Credit, with the application process able to begin up to four months prior to reaching state pension age.
From April, the state pension will see a rise of 4.1 percent, elevating the full new state pension from £221.20 per week to a higher sum of £230.25 per week, whereas the full basic state pension will see an increase from £169.50 per week to £176.45 per week. To qualify for the full new state pension, typically you need 35 years of National Insurance contributions, and to get the full basic amount means you need 30 years' worth of contributions.
With public spending under pressure, numerous finance specialists are suggesting that the current triple lock might need revision in the near future. Steven Cameron, pensions director at Aegon, has put forward a potential alternative, asserting: "Rather than increases each year being the highest of earnings growth, inflation or 2.5%, some smoothing could be introduced over time.
"Pensioners would receive an inflation increase as a minimum, and if over the previous three years wage growth has on average been higher than inflation, they’d get an extra uplift." He explained the rationale for this metric, saying: "This avoids widely fluctuating outcomes at times when both inflation and earnings growth are unpredictable, smoothing things out but ensuring pensioners still share in sustained increases in the nation's wealth."