Benefits to stretch a State Pension

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New figures released by the Office for National Statistics (ONS) show that inflation was higher than expected for September – which will mean a rise in State Pension values come April.

Back in 2010, the coalition government introduced its ‘triple-lock’ guarantee over the State Pension, guaranteeing an annual rise in line with either the higher of the inflation figures, the change in average earnings or a minimum of 2.5 per cent. September’s inflation figures were unexpectedly high, with the Consumer Prices Index (CPI) tracking at 2.7 per cent instead of the predicted 2.4 per cent. The inflation rate in September will therefore trigger a 2.7 per cent rise in the State Pension from April – that’s an increase of £2.97 per week to £113.12 – under the government’s guarantee.

The triple-lock was introduced as a way of mitigating the impact of the government’s decision to switch from tracking the State Pension against the Retail Prices Index to the CPI, which rises more slowly. Higher RPI relates to a higher cost of living, so concern about how far State Pension payments stretch continues.

Yet research has suggested that UK pensioners are missing out on up to £2.8 billion worth of benefits and credits simply by failing to apply for them. This guide put together by financial services firm Key Retirement Solutions runs through some of the windfalls pensioners may be missing out on:

Pension Credit

Pension Credit consists of either Guarantee Credit or Savings Credit, and it tops up your income based on an assessment of your income from all sources. To qualify for Guarantee Credit, weekly income needs to be below £145.40 for a single person and £222.05 for a couple. Savings Credit is for those who have a small income from another pension plan or savings.

Attendance Allowance

If you qualify as physically or mentally disabled, up to £79.15 per week can be obtained to assist with care costs.

Winter Fuel Payment

The Winter Fuel Payment provides anyone claiming the State Pension with between £100 and £300 towards their winter heating bills if they were born before January 5th 1952. It should happen automatically but doesn’t in many cases, and sometimes claims can get the amount increased if your circumstances have changed. Also, when the temperature really drops, there are added benefits on offer; the Cold Weather Payment kicks in when the temperature drops below zero degrees Celsius for seven consecutive days, and pays £25 per day during the freezing conditions.

Funeral Payments

If someone close to you dies and the responsibility for arranging their funeral falls upon you, you may be eligible for a tax-free payment to help meet the costs, including up to £700 for funeral expenses, plus travel costs.


Pensioners are eligible for a free TV licence from the date of their 75th birthday, while anyone over the age of 60 in England will be eligible for free prescriptions and sight tests. Free dental treatment and a voucher towards the cost of glasses or contact lenses are also available for those receiving Guaranteed Pension Credit.


Alongside the benefits pensioners can receive to top up their pensions, there are loans available from the government under certain circumstances. For those on a fixed budget, sudden, unexpected costs can lead to the development of a debt spiral from which it can be hard to escape. Budgeting Loans can help with rent and the cost of buying furniture and clothes; they are interest-free and can be paid back over two years. Your local authority may also be able to provide a Crisis Loan in emergency circumstances.

Deferring Your State Pension

One thing to consider before you take up your State Pension is whether you can defer collecting it. It may be beneficial to live off your other income – savings, investments or a private pension plan – and collecting your state allowance at a later date; your State Pension will increase by one per cent for every five weeks you defer it, equating to 10.4 per cent a year.

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4 Responses to Benefits to stretch a State Pension

  1. SavvyJames says:

    Though I am on the other side of the pond, I enjoyed the read. The State Pension referenced here appears to be very similar to our Social Security pension program, with a lot of the same considerations (e.g. linkage to CPI).
    SavvyJames recently posted..AnnuitiesMy Profile

  2. Thanks for sharing this. The state pension is definitely something that worries me particularly as I’m currently watching my parents collect their pension now and they don’t get much at all from the state. My parents are looking into pension credit and attendance allowance, both would make a real difference.

    I didn’t realise that deferring the state pension was an option, so that’s really handy to know. Thanks again!
    Hayley @ A Disease Called Debt recently posted..Christmas Money Making ChallengeMy Profile

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