The government is considering changing the way pension credit is calculated to encourage over-65s to stay in work.
Currently, older workers on low to medium wages lose their entitlement to pension credit if they earn more than £5 per week, but ministers are considering scrapping this rule.
Pension credit is available to older people and guarantees an income of at least £132.00 for single individuals and £202.40 for those with partners. Every pound earned over the first £5 is deducted from a person's pension credit.
In an attempt to avert the oncoming retirement crisis, with more than 800,000 people turning 65 in 2012, the government is considering abolishing this rule and allowing people to stay on in work and keep their wages, the Telegraph reports.
Without this rule, older workers could stay in work until they reach 70, drawing their state pension as well as their wages from 67 or 68, delaying retirement funding from the Exchequer.
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