My state pension will be cut by £70 a week from next April - what's going on? Steve Webb replies

 

 

I am a 75 year old expat pensioner living in Spain. I recently received a letter from HMRC to say that from April 2020 a new law comes into place, meaning that I will receive £70 less a week in state pension because my wife won't have reached pensionable age until 2024.

I also received another letter saying I will receive the state pension increase until 2023. Although it didn't say in the letter what happens from 2023 onwards, I am presuming that I will not get an increase after that date.

I left school when I was 15 years old and got an apprenticeship as a design draughtsman, and have had a few other different jobs until I retired.

 

Fall in income: Why is my state pension being cut by £70 a week from next year? (Stock image)

I was made redundant three times over the years, but have never wanted to receive benefits, so I found jobs with less pay, like washing dishes in a local hotel for a few months, until I found a better paid job.

 

I have paid into the system all my working life, so that I would receive a full state pension.

I was wondering if you had any information as to what will happen after 2023. I have lived in Spain for over 15 years now, so I am not allowed to vote in any elections, including a second referendum if the UK decided to have one. I hope you can help.

 

    

Steve Webb replies: The letter that you have received from the Pension Service is to tell you that an extra payment that you currently receive on top of your state pension will cease in April 2020.

This relates to an extra amount which people used to be able to claim for what the system calls an 'adult dependent'.

Under the terms of a law passed in 2007, no new claims for this top-up have been possible since 2010, but those who were already getting the payment in 2010 (as I think you must have been) have been allowed to continue to receive it until now.

It may help if I explain a bit more about what that payment is and what is changing.

 

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When the National Insurance system was designed, the assumption back in the 1940s was that each household would have a male breadwinner whilst his wife would (often) spend part of her life bringing up children and out of paid work.

As a result, various rules were introduced to provide for couples which included a married woman who did not have much income or pension in her own right.

 

One feature of this system which arose from this view of the world was the idea of an 'adult dependency' increase.

Originally, most National Insurance benefits paid an extra amount to claimants who had a spouse who was financially dependent upon them. These have been gradually abolished and are now finally being removed from the state pension system.

For the avoidance of doubt, we are talking here about an extra payment that a married man might receive, as part of his state pension, because his non-pensioner wife was financially dependant on him.

 

We are not talking about pensions that women might claim in their own right when they reach state pension age.

As I mentioned above, since 6 April 2010 no new claims for this adult dependency addition to the state pension have been accepted.

But, as a concession, those who were already in the system by that point were allowed to continue to receive the payment for up to 10 years.

In most cases, the spouse would reach state pension age during that period and she would then claim a pension in her own right. This would generally lead to the removal of the addition to the husband's pension in any case.

 

Your case is slightly unusual in that your wife is significantly younger than you and still has not reached state pension age more than a decade after you started to receive your state pension.

Unfortunately, this means that there will be a gap between the date when your addition is stopped in April 2020 and when your wife's state pension starts in 2024.

 

You also refer in your question to 2023 but this relates to a different matter. Because you live in the EU, there has been some uncertainty about whether the annual pension uprating that you receive would be affected by the United Kingdom's exit from the European Union.

The UK government has made a pledge to continue such upratings at least until 2023. What happens beyond that date will depend on decisions by the UK government at that point.

 

This commitment will however only apply to any pension that you are entitled to receive under normal state pension rules and I'm afraid will therefore not protect the 'adult dependency' addition which will stop next year.