A small cut or two for pensioners

Today’s Autumn Statement reverses the decision to withdraw large amounts of people’s Tax Credits, but otherwise it doesn’t have much to say about benefits.  Most of the decisions  relate to changes in timing.  Apart from that, there’s a plan to make social renting subject to the same Local Housing Allowance rules as private rented housing and rules to stop some claimants spending more than a month abroad.

The effects of cuts or spending decisions generally appear in the tables of a Blue Book, on pp 112-3.   It’s surprising that two apparently minor tweaks to the ‘Savings Credit’, a complex addition to  the means-tested Pension Credit, are set to save £135m next year.  The Savings Credit currently costs £618m, and goes to 1.15m pensioners (an average of £536); the projected saving is more than 20%.   One of the two tweaks is a small adjustment in the rates:  Paragraph 3.49 states:  ” The Savings Credit threshold will rise to £133.82 for a single pensioner and to £212.97 for a couple (note:  this year’s rates are £126.50 and £201.80), which will reduce the single rate of the Savings Credit maximum by £1.75 to £13.07 and the couple rate by £2.68 to £14.75. ”  The other tweak, in para 1.135, is this:  “by adjusting the Savings Credit threshold, the Pension Credit awards for those currently receiving Savings Credit will be frozen where income is unchanged.”  If this means that people receiving Savings Credit will lose the value of the £4.40 increase in the minimum guarantee, it will affect about 723,000 claimants (the ones who get both the Guarantee Credit and the Savings Credit).  That  could add up to the size of cut the Treasury is talking about – but this money is not actually being saved, it’s just not being spent on some while it is being spent on others.

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