‘We’re denied pension credit because I’m 15 years younger than my husband – we feel cheated’

Dear Vivianne, 

Your case highlights clearly the difficulties faced by those on low incomes when weighing up whether benefits could actually be more valuable than work.

Based on what you have said, you are earning roughly £167 a week, or £8,669 a year.

You say your husband receives the basic state pension which, at the full rate, currently pays £156.20 a week – you don’t mention whether he has any additional state second pension (also known as “Serps”) as well, but assuming not, your joint yearly income is £18,915, or about £364 a week.

This is slightly below what the Pensions and Lifetime Savings Association says is needed for a minimum living standard in retirement. Without your earnings and just your husband’s pensions, your income would be £10,246, or £197 a week. 

You do not mention how much you have saved in your private pension, but it sounds as though you are not drawing on it for the time being, which is probably sensible as you are still 10 years away from your state pension age. (It will be 67 for you because the transition from 66 to 67 happens between 2026 and 2028). 

As you are working now and have presumably worked for several years, you will also be entitled to a state pension and, unlike your husband, you will receive the new state pension.

If you have worked the full number of qualifying years, and even if you are missing a few, this will probably be higher than your husband’s. 

From next April the full rate will pay £221.20 a week, or £11,502 over a year – by the time you get there, with triple lock-based rises (or whatever the guaranteed rises are set by at that point), it will be higher. 

So you could possibly be earning more as a pensioner in 10 years’ time than you earn now working for 16 hours on minimum wage – it’s worth checking your National Insurance record to see how many qualifying years you already have and how many more you need to get this full amount.

Pension credit is a benefit that is designed to top up a retired person’s weekly income to £201.05 if you’re single, or your joint weekly income to £306.85 if you have a partner. Thanks to your job, you are together earning £58 a week more than this amount. 

But the issue is that because you don’t get pension credit, you also miss out on other benefits that are available to those who do receive it, such as council tax discounts, cost of living payments, warm home discount schemes, and others. 

Together, it’s possible that these extras received by those on pension credit add up to more than an extra £58 a week, in which case, you could indeed be slightly better off on that than working.

But unfortunately because you are not yet at state pension age, you wouldn’t be eligible for full pension credit yet as a couple anyway, as both partners need to have reached state pension age to be eligible.

That said, there is a possibility that your husband could be eligible for the “Savings Credit” element as he reached state pension age before April 2016 – this is worth checking. 

It is possible that given your relatively low income, you would be eligible for some Universal Credit. Universal Credit eligibility is reduced if you have a paid job and £6,000 or more in savings, which you do.

For every £1 you earn, your payment goes down by 55p. You’d have to apply for this as a couple even though your husband has passed state pension age.

You could still be eligible even though you work 16 hours a week. There are benefit calculators on the Government website here: https://www.gov.uk/benefits-calculators – you could use to see if it is worth applying. 

Write to Pensions Doctor with your pension problem: pensionsdoctor@telegraph.co.uk. Columns are published weekly

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