2009 Budget - Pension Credit - Capital Disregard

The capital disregard in Pension Credit, and pensioner-related Housing and Council Tax Benefit, is to be increased from £6,000 to £10,000 in November 2009.
Our view

The amount of capital disregard has been £6,000 for several years. The increase will improve the amount of Pension Credit available to eligible pensioners and is a welcome change.

What the Budget says

Pension Credit is the state benefit that aims to ensure pensioners have at least a minimum amount of income in retirement.

The amount of Pension Credit is affected by the amount of income the pensioner already has. Amounts of capital savings under £6,000 are not taken into account when calculating the amount of existing income. From November 2009, the amount of this 'capital disregard' will be increased to £10,000.

The information provided is based on our current understanding of the Budget 2009 and associated documents and may be subject to alteration as a result of changes in legislation or practice.

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.