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Pension Credit

Volume 504: debated on Thursday 21 January 2010

To ask the Secretary of State for Work and Pensions if she will make it her policy to increase pension credit payment levels to compensate for the effects of lower interest rates on the income of pensioners. (309699)

From November 2009 the amount of capital completely ignored in the calculation of pension credit was increased from £6,000 to £10,000. This change was made in response to the impact of falling interest rates on pensioners and means that around 88 per cent. of pension credit recipients have all of their capital ignored.

From April 2010 the standard minimum guarantee in pension credit is due to increase by 2 per cent. This means that, from April, no single pensioner need live on less than £132.60 a week and no couple on less than £202.40 a week. The above earnings increase in the pension credit guarantee underlines the Government's ongoing commitment to tackling pensioner poverty.

We have a good track record of reducing pensioner poverty. In 2007-08 there were 900,000 fewer pensioners in relative poverty than in 1998-99 (measured as below 60 per cent. of contemporary median household income after housing costs). Pensioners are less likely to be living in poverty, as measured by relative low income after housing costs, than the population as a whole.