Pension Credit reform for mixed age couples

On the 15th May 2019, the rules governing how some people qualify for Pension Credit changed.  Before this date, mixed age couples, where one person is above State Pension age (SPa) and the other below, would both qualify for Pension Credit when the older person reached SPa. Now, they will have to wait until the younger person does.

The Government believes that 60,000 couples will be affected by this change within 5 years, generating annual savings of £385million.

For mixed-age couples on a low income, this policy change could have serious effects.  The expectation from the Department for Work and Pensions (DWP) is that they would claim Universal Credit instead of Pension Credit – a benefit designed with the sole aim of encouraging working age people to find and increase paid work, and was never intended for pensioners to claim. As a result, mixed age couples receiving Universal Credit are very likely to be significantly worse off than those claiming Pension Credit.

Worse off under Universal Credit

The basic rates of income from Pension Credit and Universal Credit for couples are very different.  Under Pension Credit, a couple would receive a Minimum Guarantee of £255.25 per week, compared to £115.13 under Universal Credit. 

However, the differences do not end there, as Pension Credit can provide access to other sources of social security income that Universal Credit does not:

  • A mixed age couple on Pension Credit would expect to be ‘passported’ to – able to claim - other social security benefits, such as Housing Benefit and Council Tax Benefit. In both of these cases, where people who qualify for the Minimum Guarantee of Pension Credit are likely to receive a full rebate for both, those on Universal Credit will typically only receive a partial reduction.
  • Mixed age couples who live in social housing would also be subject to the spare room subsidy (or ‘bedroom tax’) which could further reduce their income if their home is deemed to be larger than they need.
  • Disabled people will face tougher eligibility criteria to qualify for additional payments under Universal Credit than Pension Credit, though more severely disabled people will see a slight rise in income from additional payments.
  • Additional payments for carers may be higher on Universal Credit than Pension Credit, but nowhere near enough to offset other losses.
  • Income from pensions is treated as earnings in both benefits, but the lower ceiling means that a pension of more than £480 per month will wipe out any eligibility for Universal Credit.
  • Universal Credit has been frozen since 2016/17, while Pension Credit has continued to be uprated annually, meaning that the disparity between the two has grown and will continue to do so.
  • Under Universal Credit, the older person in a mixed age couple would not be expected to look for work, but the younger person still would, and they would have to abide by strict conditionality rules or risk losing a proportion of their benefit which would have a detrimental impact upon household income.
  • Passporting to the Warm Homes Discount scheme (a rebate off your electricity bill) and Cold Weather Payments will also be different, with Universal Credit claimants not having an automatic right to these benefits if they do not meet further criteria.

Measuring the impact on mixed-age couples

It is difficult to measure the effects of all of these changes with real accuracy.

However, on the basis of the differences in applicable income in Universal Credit and Pension Credit, and the additional effects on Housing Benefit and Council Tax Reduction, the Pensions Policy Institute calculates that in some specific circumstances a mixed age couple could be over £10,000 per year worse off on Universal Credit than they currently would be on Pension Credit. This is a drop in income of 45%. 

The full briefing note, published by the Pensions Policy Institute is available here.

Dr Mark Baker is a Senior Policy Researcher at the Pensions Policy Institute.

Have you been affected by any of these issues?


If you have been affected by any of the issues described in this blog, or simply need someone to reach out to, you can call Independent Age’s freephone Helpline for information and advice on 0800 319 6789.


The views and opinions expressed in this article are those of the author and do not necessarily reflect the policy or position of Independent Age