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Briefing Note 30 - The Pensions Commission’s proposals and Pension Credit
Around half of older people in the UK are eligible for the means-tested Pension Credit (PC). PC is widely seen as problematic, so the number of people eligible for it will be a critical measure of success for the proposals in the forthcoming Government White Paper. The Pensions Commission estimated how many people would be eligible for PC after their proposals for pension reform, however this number is uncertain. The number eligible for PC would remain historically high, which may not be desirable.
This Briefing Note gives three examples of affordable reforms which would reduce the number eligible for PC to below historical levels:
- Increase Basic State Pension to the Guarantee Credit level in 2010. Stop S2P accruals.
- Increase Basic State Pension faster than earnings to reach the Guarantee Credit level by 2030. Stop S2P accruals.
- Replace accruals to Basic State Pension and S2P with accruals to a new pension at Guarantee Credit level.
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