Government policies
Pension Credit and predecessors
Pension Credit
(replaced the Minimum Income Guarantee)
| Starting dates | October 2003: introduced Uprated annually in April of each year |
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| Key department | DWP | ||||||||||||||||||
| Key delivery agency | Pension Service | ||||||||||||||||||
| Budget/target/comment |
The main change from the Minimum Income Guarantee that it replaced is that the Pension Credit will operate like the other tax credits, with a reduction of 40 pence for every additional £1 in pension income. In contrast, the Minimum Income Guarantee was a fixed guaranteed minimum income, with the individual losing a full pound in government benefit for every pound that their pension income was above this level. When first introduced, the guaranteed minimum weekly income was the same as for the Minimum Income Guarantee, namely £102.10 for a single pensioner and £155.80 for a pensioner couple. The table below shows how the rates have changed over time.
Depends on household, rather than individual, income. The basic State Retirement Pension in 2007/08 is £87.30 for a single pensioner and £139.60 for a pensioner couple. So, for someone with the full State Retirement Pension, the maximum amount of Pension Credit is around £30 for a single pensioner and £40 for a pensioner couple. 2.7 million households were receiving the Pension Credit in February 2006. A target of at least 3 million households by 2006, and 3.2 million by 2008. Cost of the reform, including changes to Housing Benefit and Council Tax Benefit for pensioners, estimated at around £1 billion in 2003/04 and £2 billion in 2004/05. |
Pensioners' Minimum Income Guarantee (MIG)
| Starting dates |
April 1999: introduced April 2000: uprated April 2001: uprated April 2002: uprated October 2003: replaced by Pension Credit |
|---|---|
| Key department | DWP |
| Key delivery agency | Pension Service |
| Budget/target/comment |
When introduced, set at £75 a week for single pensioners and £116.60 for pensioner couples, representing increases of around £4 and £7 respectively over the levels of income support that were previously available. For single pensioners, raised to £78.45 in April 2000, £92.15 in April 2001, £98.15 in April 2002 and £102.10 in April 2003. For pensioner couples, raised to £121.95 in April 2000, £140.55 in April 2001, £149.80 in April 2002 and £155.80 in April 2003. Budget estimated at £3.8 billion for 1999/00, £4.1 billion for 2000/01, and £4.4 billion for 2002/03. |