How Much Savings can a pensioner have before benefits are affected?

[John Gibson]

My 90 year old widowed mother receives pension credit of around £132 a week. She is exempt from paying rent for her council house and her council tax is subsidised. There is no other money coming into her household. I would be grateful if you could tell me how much money she can have in the bank as savings before her benefits are affected.

[Teri Harman]

Dear John

For Pension Credit up to £10,000 savings is ignored in the means test. Any savings over £10,000 will be counted as £1 a week assumed income for every £500, or part thereof, over £10,000, so for example if your mother had £11,200 she would be assumed to have an additional income of £3 a week.

However, because of your mother's age she should not have to inform the Pension Service if her circumstances change and her savings increase. This is because when you are awarded Pension Credit you are given what's called an "assessed income period" which means for the time stated (normally up to five years) you do not need to report any changes. People over 75 are normally given an assessed income period that lasts indefinitely and those whose assessed income period runs out after the age of 80 will not usually need to be reassesssed at all.

[John Gibson]

Thank you Teri.