{"id":505410,"date":"2025-10-16T23:54:10","date_gmt":"2025-10-16T23:54:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/505410\/"},"modified":"2025-10-16T23:54:10","modified_gmt":"2025-10-16T23:54:10","slug":"two-tier-dwp-state-pension-rule-punishing-older-pensioners-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/505410\/","title":{"rendered":"\u2018Two tier\u2019 DWP state pension rule punishing older pensioners | Personal Finance | Finance"},"content":{"rendered":"

A state pensioner has hit out at the \u2018two-tier\u2019 rule which means older retirees who have savings are given less money by the DWP<\/a>.<\/p>\n

The DWP<\/a> pension system is split into two age-based types: the new state pension<\/a>, for those who retired from 2016, and the old basic state pension<\/a>, for those who reached state pension<\/a> age before 2016.<\/p>\n

New state pensioners with a full National Insurance record can get \u00a3230.25 per week, or \u00a311,973 a year, in their state pension<\/a> payouts.<\/p>\n

Meanwhile, old basic state pensioners only get \u00a3176.45, or \u00a39,175 a year, leaving a gap of nearly \u00a32,800.<\/p>\n

Pension Credit<\/a> is designed to plug this gap, by giving older state pensioners a top-up of their income up to \u00a3227.10 per week, which means older pensioners claiming Pension Credit can get \u00a311,809 per year, almost the same amount as the new state pension<\/a>.<\/p>\n

However, there is a means testing element which applies to Pension Credit<\/a> which does not apply to the new state pension<\/a>.<\/p>\n

Those who have savings will start to lose their Pension Credit eligibility, with every \u00a3500 of savings a pensioner has in their name reducing their Pension Credit eligibility. This does not apply to the new state pension<\/a>, so those who retired after 2016 can have an unlimited amount of savings and still get the full \u00a311,973.<\/p>\n

One state pensioner, Joan Thornton, 78, from the West Midlands, got in touch with the Express with concerns about the unfairness of the \u2018two-tier\u2019 system.<\/p>\n

She told the Express: \u201cTo my mind, the most unfair aspect of the two-tier system, is that even though anyone born before 1945, now 80+, had to work for 44 years (39 for women) to get a full state pension<\/a>, they get less than people on the new pension who qualify after only 35 years.<\/p>\n

\u201cThey are more likely to need more heating, more help with care etc and they are approximately \u00a32,800 a year worse off than those in receipt of the new state pension<\/a>.<\/p>\n

\u201cEven if they get the full amount of pension credit this shortfall cannot be filled!<\/p>\n

\u201cAlso while the triple lock<\/a> is in place, the gap between the old and new state pensions will continue to grow.\u201d<\/p>\n

The government\u2019s rules about Pension Credit<\/a> explain how savings will cut your eligibility for Pension Credit. It says: \u201cIf you have more than \u00a310,000, every \u00a3500 over \u00a310,000 counts as \u00a31 income a week. For example, if you have \u00a311,000 in savings, this counts as \u00a32 income a week.\u201d<\/p>\n

This means that even if your income is below the Pension Credit maximum of \u00a3227.10 per week, every \u00a3500 of savings will reduce the amount you can get from the benefit. At a certain point, you will not be able to claim any Pension Credit at all.<\/p>\n

Ms Thornton continued: \u201cIt is denied to anyone with more than approximately \u00a325k in savings.<\/p>\n

\u201cYou might say that anyone with that amount of savings doesn\u2019t need help but if you claim the new state pension<\/a> your savings are irrelevant, making the two-tier system totally unfair.\u201d<\/p>\n

The DWP<\/a> has been contacted for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"A state pensioner has hit out at the \u2018two-tier\u2019 rule which means older retirees who have savings are…\n","protected":false},"author":2,"featured_media":505411,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,165652,24705,165651,2499,1786,165653,86693,16,15],"class_list":{"0":"post-505410","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-older-pensioners-savings","11":"tag-pension-credit","12":"tag-pension-credit-means-testing","13":"tag-personal-finance","14":"tag-state-pension","15":"tag-state-pension-inequality","16":"tag-two-tier-state-pension","17":"tag-uk","18":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115386546127665518","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/505410","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=505410"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/505410\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/505411"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=505410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=505410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=505410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}